Let's Find Your Next Home 

So you're thinking of buying a home, and want to know where to start? Here are a few things to consider.

Step 1: Check Your Credit Report & Score

Before getting a mortgage or any kind of loan, you should always check your credit. According to the law, you're allowed to receive one free copy of your credit report per year. You can do this by visiting Annualcreditreport.com. Scores range from approximately 300 to 850; generally, the higher your score, the better loan you'll qualify for. Don't forget to check your report for errors. If there are any, dispute them. It may help your credit score. You can also check your credit score for free at www.creditkarma.com, and while this site isnt 100% accurate, it will give you a good idea of if you're in the "range" to buy (typically over 620 is what lenders will look for).

Step 2: Figure out How Much You Can Afford

You can calculate how much you can afford by starting with online calculators. There are several online mortgage calculators that will help you calculate an affordable monthly mortgage payment. Don't forget to factor in money you'll need for a down payment, closing costs, fees (such as fees for an appraisal, inspection, etc.) and the costs of remodeling or furniture. Remember that you don't always have to put down 20 percent as your parents once did. There are loans available with little to no down payment. An experienced home loan expert can help you understand all your loan options, closing costs and other fees. *Hint check out my trusted lender on home page"

Step 3: Find the Right Lender and Real Estate Agent

Well that was easy- you've found me! I have sold hundreds of homes and I KNOW what it takes to find your next home. For the first several years of my career I worked with buyers exclusively - so I understand the ups and downs on being on the buying end. Now that you've got that covered...lets get you to a lender. 

Although I'm particularly biased to recommend you to my favorite lender (seen on my homepage), ultimately to find the right mortgage lender it’s best to shop around. Get recommendations from your friends and family and check with the Better Business Bureau. Talk to at least a few lenders. They are not all made the same. My biggest fear is that a lender will tell you you're pre-approved, and then ask for extra cash at the end you werent expecting to pay (this particularly happens with online-only lenders). So be sure to ask lots of questions and make sure they have answers that satisfy you. And at the very least, interview Mark Goff at PRMI!

Once you have the right mortgage lender, make sure you at least get a pre-approval. Qualifications are only a guess based on what you tell the lender and are no guarantee, whereas a pre-approval will give you a better idea of how big a loan you qualify for. The lender will actually pull your credit and get more information about you. However, you could even take it one step further by getting an actual approval before you start home shopping. That way, when you're ready to make an offer, it will make the sale go much quicker. Besides, your offer will look more appealing than other buyers since your financing is guaranteed.

Step 4: Look for the Right Home

Make a list of the things you'll need to have in the house. Ask yourself how many bedrooms and bathrooms you'll need and get an idea of how much space you desire. How big do you want the kitchen to be? Do you need lots of closets and cabinet space? Do you need a big yard for your kids and/or pets to play in?

Once you've made a list of your must-have's, don't forget to think about the kind of neighborhood you want, types of schools in the area, the length of your commute to and from work, and the convenience of local shopping. Take into account your safety concerns as well as how good the rate of home appreciation is in the area.

Step 5: Make an Offer on the Home

Now that you've found the home you want, you have to make an offer. I will help educate you on the exact market and other homes that have sold recently so you know you're making a great investment.  Once you've made your offer, don't think it's final. The seller may make a counter-offer to which you can also counter-offer. But you don't want to go back and forth too much. Somewhere, you have to meet in the middle. Once you've agreed on a price, you'll make an earnest money deposit, which is money that goes in escrow to give the seller a sign of good faith.

Step 6: Get the Right Mortgage for Your Situation

There are many different types of mortgage programs out there, but as a first-time home buyer, you should be aware of the three basics: adjustable rate, fixed rate and interest-only.

Adjustable rate mortgages (ARMs) are short-term mortgages that offer an interest rate that is fixed for a short period of time, usually between one to seven years. After that, the interest rate can adjust every year up or down, depending on the market. These are good for people who don't plan on living in their home very long and/or are looking for a lower interest rate and payment.

Fixed-rate mortgages are more traditional and offer a fixed interest rate (and thus a fixed monthly payment) for a longer period of time, usually 15 or 30 years, though they're available in 20 or 25 year terms. These are good for people who like a predictable payment and plan on living in their home for a long time.

Both fixed and adjustable rate mortgages can have an interest-only payment. What this means is that for a certain amount of time during the loan term, you're allowed to pay only enough to cover the interest portion of your payment. You can still pay principal when you wish, but don't have to if your budget is tight. There is a myth that with interest-only mortgages, you don't build equity. This is not necessarily true, since you can build equity through home appreciation. The benefit to interest-only mortgages is that you increase your cash flow by not paying principal.

Ultimately, ask your mortgage lender or mortgage banker lots of questions about which mortgage is right for you and your situation.

Step 7: Close on Your Home

You made it to the end, congratulations! You'll be getting called to sign all of your loan and title paperwork at the Escrow company typically a few days before closing. You'll also be wiring your funds and planning your move. Pro tip: Dont plan to move on Closing Day - we usually get you keys at the end of the day and the seller can technically keep possession until 9pm. 

Step 8: Move In!

Happy dance! You own a new home (or maybe you now have an investment property)! Move in, enjoy, and be sure to thank your Realtor/Lender team!

BuyingaHomeSummer2022PDF.pdf by Larissa Butler