Why Buy Instead of Rent
In recent years, rental prices have been skyrocketing to new highs. With booming housing market with low interest rates, the monthly cost of home ownership has dropped significantly. Throughout the majority of cities owning a home has been drastically more affordable than renting.
While interests rates are at a historic low , it is important to take advantage of the dreams of owning your own property in today’s market. You’ll end up getting much more for your ,money then you would in a rental scenario and pay equal, or less on a monthly basis.
The Importance of a Pre-Approval
Prior to starting your home search, it is important to find out the loan amount the bank will qualify you for. Having this knowledge will give you the upper hand in negotiating situations, because you’ll be able to place strong offers on the right home.. Having a pre-approval letter from a lender makes any offer much stronger and lets seller know that you are serious about purchasing.
In such a booming housing market, most offers without a pre-approval letter will be dismissed. Get in touch with a lender for a no obligation pre-approval. If you do not have a lender in mind that you want to use I work with an amazing group of lenders who offer different products and services for people of all walks of life and credit situations.
There is a continued misconception about the necessities to purchasing a home. Most people are led to believe that they are required to have 20% down with a near perfect credit score to qualify for a mortgage. This scenario is simply not true. With a variety of loan option available, home ownership can be a possibility with 0% down. Standard FHA and Conventional loan down-payments are between 3.5% and 5%.
You can discuss the different loan options with the lender to see what works for you. Most bank lenders will accept credit scores as low as 640; however, you can find many local lenders who can work with credit scores of 580 for FHA loans.
Starting The House Hunt
This is where the importance of a real estate agent comes in. They can direct you to resources that provide the most accurate information. Your agent will also be looking on your behalf for new homes that come on the market, so you find out about them immediately.
When it comes to finding the perfect house, make sure to take the time to write out all the features that are a MUST and all the features you would like to have. Be sure to let your agent know about acceptable locations as well. This will help your agent get a better understanding of what exactly you are looking for and they can show you homes that best fit the needs of you and your family.
Going Under Contract
When you find the perfect house, let your agent know and you will be able to discuss the best option to move forward in putting in a strong offer. Once your offer is accepted, you will go into the pending contract period. This is the process where your mortgage goes through the necessary steps to getting approved.
Contact periods can range anywhere from a week or two for cash buyers, and generally 30 to 45 days for a buyer who has applied for a mortgage. During this period a home inspection (at purchaser’s expense usually ranging from $250-$300), termite inspections, and appraisal are conducted. Any negotiations for repairs, or price adjustments based on appraisal outcomes are made.