Six steps to owning a home
Buying a home can be a scary process but believe me … this is a good time to buy. If you take it one step at a time, keep things realistic, and talk to a Texas Realtor, you may find yourself on the path toward homeownership. Whether you’re entering the market for the first time or as a move-up buyer, these simple steps will help.
Know the score
Find out what’s on your credit report before applying for a loan. The Fair Credit Reporting Act requires each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – to provide you with a free copy of your credit report, at your request, once every 12 months. If you find errors, fix the problem before contacting a mortgage lender. If you come across legitimate blemishes, you may want to take steps to improve your credit rating before applying for a home loan. Even if you aren’t looking to buy a home today, you might consider taking advantage of this service.
If you would like more information about accessing a free copy of your credit report, visit the Federal Trade Commission’s Web site - www.FTC.gov/freereports.
Most homebuyers require a loan to complete the purchase. Before searching for a new home, meet with a few lenders and check out your loan options. If you don’t qualify for a loan or don’t like the terms offered, it will help to know where your deficiencies lie so you can work toward qualifying or getting a better deal in the future. If the loan officer reviews your financial position and feels a mortgage loan is likely, ask for a letter of pre-approval. Getting pre-approved is an important step that will not only eliminate surprises, but will place you in a strong negotiating position with sellers.
Contact a Texas Realtor
Finding a professional who understands your needs and serves your best interests is a vital component of the homebuying process. Alleviating many of the administrative hassles of purchasing a home, a Texas Realtor can guide you through every stage—from helping you determine how much home you can afford to choosing a lender and loan product that works for you. Texas Realtors have the knowledge and skills to ensure the transaction goes smoothly and are committed to finding a home that best satisfies your needs.
Determine how much you can actually afford
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Some lenders may be willing to loan you more than you ever imagined, but please be a responsible borrower. If you borrow more than you can really afford, your means to pay for other living expenses will suffer.
Typically, lenders do not like to see your total monthly debts, including your mortgage, exceed 36 percent of your pre-tax income. If you are thinking about purchasing a home, don’t tempt yourself with homes that are likely to stretch your budget too thin. Just because you’re approved for a certain amount doesn’t mean you have to look at houses for the entire amount.
Decide what you want
Narrow your home search down based on features and amenities that are important to you. Weigh your needs, budget and personal tastes, and keep the home’s purchase and resale value in mind. Here are some things to consider:
The neighborhood: Evaluate the characteristics of a neighborhood by using the Internet. There are sites that break down statistics about local school districts, occupancy rate, and crime rate. Visit mapping sites to identify the proximity of nearby parks, schools and facilities, retail outlets, restaurants and places of employment.
Type of home: Depending on your needs and your budget, you might consider purchasing a single-family or multi-family home or condominium. Talk to your Texas Realtor about the advantages and disadvantages of each.
Size and configuration: Consider size and layout. Is it right for you and your family? Can the garage hold your automobiles? If the house fits you perfectly today, can it be adapted to fit your life in the future?
Resale value: Even if you plan to be in the home for a while, it will be for sale again someday. Talk to your Texas Realtor about what factors might contribute to a home’s resale value.
Knowing the preliminary steps to the homebuying process will help you decide if homeownership is the right move for you. Your Texas Realtor can be a tremendous asset, helping you understand the details through every phase and managing the details of the transaction.
For more information on real estate, I invite you to visit ArlingtonRealtor.com.