Are you thinking of buying a new home? You should know that it’s not a process that happens overnight, as it can take anywhere from three to six months to buy into the American dream. Since it’s a seller’s market, you might not be able to find something right away.
The type of loan you use can also dictate the length of the process, as those who use FHA, or the USDA will find that getting through the process is a bit grueling. Still, it’s all worth it to have the home you’ve always dreamed of owning. However, there are a few things you need to know about the home buying process to minimize complications.
Before you go on your first house hunt, you need to see your credit score. You can pull a free credit report online once a year for each of the three bureaus, but this won’t give you the score.
You must know where you stand to ensure that you can get a reasonable interest rate. Most lenders like to see a credit score of over 620 to qualify, though some programs will go as low as 500, like FHA.
Lenders don’t approve loans for a home that exceeds 30 percent of your gross monthly income. However, what they say you can afford and what you can handle is much different.
These banks don’t include some expenses, as they only look at the basics. You may have more coming out each month that they don’t know about. So, it would help if you made sure you could genuinely afford it before you shop.
3. Get Pre-approved
Today’s housing market is crazy, and most sellers won’t even entertain your offer if you’re not already pre-approved. It takes time to go through the pre-approval process, and it’s much different than being pre-qualified. The preliminary approval means that the bank has checked your credit, ran the numbers, and will lend you money within their perimeters.
While it seems like you can find a good deal when looking at homes for sale by owner, it’s always best to work with a realtor. Whether looking at houses for sale in New Orleans or Baton Rouge, you need someone with an inside into that market.
Realtors always know about homes that haven’t been listed yet, which can give you an inside advantage. It may be impossible to find anything in busy areas and bigger cities without the assistance of a professional.
Now it’s time to do the house hunt, and you want to find a place close to your jobs with good schools, plenty of green space, and lots of shopping varieties. With gas prices so high, the closer you can find a place to your job, the better it will be.
Additionally, it’s wise to keep an open mind about the location, as you might get more bang for your buck by merely going ten minutes down the road.
Do you need a home for a growing family, or are you looking to downsize? Your needs will dictate what and where you buy. You want three bedrooms, but could you manage with two?
Determine your needs versus your wants. You don’t want to go through the moving process again if you find out that your home isn’t well equipped to handle your family’s needs.
Once you’ve found the place to hang your hat, you want to make sure that there’s no termite damage or other issues that aren’t visible. While some areas don’t require these inspections, it’s worth the money to pay for this valuable information.
If you’ve ever watched any television shows about home inspections, it’s clear how much people try to cover things up just to sell their abode. A good home inspector can help you make a good investment and protect you from shady sellers. Buying a home can be tiring, as there are so many steps that you must follow. However, it’s worth taking your time and doing things right. It would help if you never tried to rush through the process and skimp over vital things, like a home inspection. While it seems like a wise choice to save time, it could cost you dearly in the end.