Triple E Realty has agents to assist you in your home buying needs, contact us today to be paired up with an agent! Let’s discuss the must-haves when it comes to home buying!
Credit Score - 620 is typically the minimum credit score needed to buy a house, though some lenders will go down to 580 or below. The average credit score is 620 to 680. Very good credit is 680 to 740. 740 and over is an excellent credit score. A good credit score is key to getting the best mortgage interest rate. Do you know your credit score? If your credit score is lower than 600, many lenders will assist you with ways to raise your score.
A bad credit score could negatively impact your chances of a mortgage loan, but there are plenty of actions you can take to stay on top of it, such as checking your credit report for mistakes and properly managing your credit use. Consumers can check a credit score from three of the main credit bureaus (Experian, Equifax and TransUnion).
Loan Pre-Approval - Get Pre-Approved not Pre-Qualified. We recommend being pre-approved over being pre-qualified. From experience, most sellers prefer to choose pre-approved buyers who have done the work with their lenders in order to purchase a home.
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
Down Payment - Many have purchased homes with 5%, 10% or 20% for their down payment. Twenty Percent down is a typical down payment with most mortgage lenders in order to avoid paying for PMI. PMI is Private Mortgage Insurance, which is added insurance charged by mortgage lenders in order to protect themselves in case you default on your loan payments.
An added benefit to a sizeable down payment, you may lower your interest rate, which will save you tens of thousands of dollars in interest over time.
If you have served in the military and qualify you could use a VA loan and those require less than twenty percent down while avoiding PMI’s.
Mortgage Calculator - It’s wise to know how much house you can actually afford. Once you’ve reviewed your budget, expenses and income use the mortgage calculator to confirm the house fits your budget.
Must-Have List - Home-buying is an emotional process. Ideally, you should set aside all your emotions when evaluating a house. Practically, that is impossible. Instead, make a checklist of your must-haves, nice-to-haves and other essentials. Then print copies of this checklist. Every time you visit a house, take the checklist along with you; take photographs so you can cross each item off your list. If you fall in love with the house and your checklist shows that the house has none of your must-haves, it will at least make you pause and think.
No Other Big Purchases - Pause any new credit activity. Any time you open a new credit account, whether to take out an auto loan or get a new credit card, the lender runs a hard inquiry, which can temporarily ding your credit score. If you’re applying for a mortgage soon, avoid opening new credit accounts to keep your score from dipping.
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan. Be sure to read our Mortgage Do’s and Dont's.
Have Your Home Inspected - Would you buy a car without checking under the hood? Of course, you wouldn’t. Hire a home inspector. It’ll cost about $200 - $400 but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool to request the seller to make necessary repairs, offer a repair credit or lower the price. It’s better to spend the money upfront on an inspector than to find out later you have to spend a fortune on repairs that you weren’t aware of.
Review HOA Policies - Ask for the homeowners association contract before you make a decision. Many HOA’s have policies that could affect you in the long-run. Once you identified the neighborhood you found most desirable, ask for a copy of the HOA contract after going to an open house in the area. If you are buying a house that is part of an HOA, it is absolutely essential to read the HOA contract before you do anything else.
Hiring A Realtor - Hiring a realtor will save you time and you will have an expert to help guide you along the way. A realtor can send you listings directly from the MLS that fit your parameters and you will not waste time looking at active sales or pending offers online. A realtor often knows of new listings coming up that are not yet on the market. A realtor can generally spot overpriced listings and advise you accordingly. A realtor will negotiate the best price on your behalf. Hiring a realtor will not only help you save time but money as well.
Our agents are one call away to help you navigate through the home buying experience. Our agents will help prepare you for buying your home in 2020.