Buying a Home: Seven Important Tips
Posted: Monday, July 20, 2009
by Debbie Bresee
http://www.realestatesouthnashville.com
If you're ready to buy a home, there are some important things for you to think about. This list may vary from region to region, but here are seven tips for you to consider before, or during your next home purchase.
1. Set Up A Budget
Make sure you can actually afford the payment your loan officer says you can afford. Your mortgage banker may tell you that you can afford a certain payment according to their calculations. But only you know your true spending habits. Borrowing the maximum amount may mean changing some of your spending habits. Make certain that you know the true cost of living in your new home, and that it fits in your budget.
As a home buyer, you should check out the schools and school districts, city and county taxes, and association fees before you buy. School districts and taxes can vary from one city to the next, one subdivision to the next, and even one street to the next depending on where you're looking to buy. Call or visit the local government offices, and visit the local schools. Give them the address of the home you're considering and verify the pertinent information in their system.
3. Get a Home Inspection
It's so important to have a licensed home inspector to thoroughly inspect the home you want to buy. And when looking for a home inspector, check to make sure they're licensed. Many home inspectors go the extra mile and earn additional certifications that require extra schooling and testing.
4. Get a Good Faith Estimate (GFE)
Ask your loan officer or mortgage banker for a Good Faith Estimate for your loan. This is a written estimate that should show the true cost of the mortgage. Ask questions if you don't understand any of the fees or charges. See how many loan origination points or discount points you are truly paying.
5. Choose the Proper Lock for Your Mortgage Rate
Keep in mind, it costs more money to lock a rate for a longer period of time. Make sure if and when you lock your rate that you can close the transaction within that period of time. Ask about a "float down" option. That's when your lender allows you to re-lock at a lower rate if the interest rates go down.
6. Don't Apply for Any New Credit
Your lender will probably pull your credit at the beginning, and also at the end of your loan process. They will want to make sure nothing has changed. They'll look for new derogatory credit, such as additional late payments or judgments. They'll also look to see if you've applied for any new credit. New credit lines may alter your debt ratio and subsequently disqualify you from your mortgage. This includes applying for credit to buy furniture, appliances, cars, etc. Ask your mortgage lender how their loan qualification process works.
7. Don't Make Changes in Your Employment
Unless it's been fully disclosed AND approved by your mortgage lender, don't make any changes to your employment status. This includes changing companies, giving notice and/or quitting your job. Once again, your mortgage lender should be able to answer your questions regarding the application process, qualifying, and obtaining a home mortgage.
Once you've been approved for your mortgage, anything that affects your debt ratio, credit score, or income could possibly jeopardize your ability to obtain a loan.
It's so important to investigate, clarify and verify all pertinent information about the condition of the home you want to buy, its school system, taxes, and the mortgage you're obtaining. This is only a partial list. And some of these items may vary depending on the country, region or city where your new home is located.
Good luck with your next home purchase!
Debbie Bresee is a REALTOR and Broker in the Brentwood and Nashville, Tennessee areas. If you'd like to browse through MLS listings of Brentwood or Nashville Homes please visit her web sites.
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Top-level comments on this article: (5 total)Good advice, Debbie. Thanks for sharing your expertise with us. Buying a home can be a tricky thing.
Thanks for the guidance. These things somethimes seem obvious but can easliy be overlooked.
Good info for first time buyers (if indeed they exist in today's economy!) ready to seriously consider a new home. I have two homes for sale and the absence of buyers is overwhelming.Thanks for your comments. I realized these tips were simple when I wrote the article. But so many times the simple stuff is overlooked. I've actually had buyers do some of these things like apply for new credit or quit their job. It's challenging to get the deal back on track when that happens. Thanks again for the reviews!
Great help for the prospective home-buyer; especially, the first-timer. We just sold our homeplace and are about to purchase a new one. Although, we will be paying cash, we still need to go through many of the steps you have outlined. Buying a home can be an overwhelming prospect.Thanks for sharing. And welcome to Searchwarp.Sandra
Debbie, thank you soo much for the information. Like so many of us, we do not know what to ask and the realtor knows only, sell, Sell, sell, and buy, buy, buy.
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