Things Every Home Buyer Should Know

Not everyone has a lot of experience buying and selling real estate.  However, there are some things that every home buyer should know about the real estate purchasing process.

You will probably need to have a minimum a certain credit score.

Your credit is extremely important.  At the time this is being written, most lenders want you to have a credit score of 620 or higher.

Do not buy anything during the loan process with your credit (i.e. Do not borrow).

Your loan approval depends upon the amount of money you are borrowing, and if you change the amount you borrow, you affect calculations that potential lenders use to determine whether they want to risk lending to you. By borrowing—or even applying for additional non-housing loans—during the home loan application process, it will disrupt (slow down) your mortgage loan process.  It might even entirely STOP the mortgage loan process.

You probably should get Title Insurance.

Title Insurance is simply protection against any properly loss or damage caused by pending liens, existing defects within the Title to the Property.  Examples of existing property title defects are other claims of ownership to the property (besides you), fraud, forgery, etc.

Set aside money for property closing costs.

Before you officially buy a property, there will be a closing.  You may or may not need to be there, but there will be a closing.  There are costs associated with this closing process that too many people are not prepared to pay.  Examples of closing costs are closing fees, prorated property taxes that were pre-paid by the previous property owner, property recording fees, transaction fees, transfer fees, etc.

Set aside money to pay for home owners insurance in advance for one year.

Lenders will require that you buy home owners insurance to cover the cost of a catastrophe to your home.  You never want to “need” to make that type of insurance claim, but if you own a mortgage on a home that is in disarray, you are in position to cover the amount you borrowed in the event that catastrophe happens.  Not only will this will protect the lender’s investment, but also it will your credit.  Be aware that you will need to set aside money to pay for this in advance.

Your best home loan interest rate is based on your credit, but you still should shop around.

Your credit score definitely plays a large role in determining how high or low your interest will be on your home loan.  Mortgage rates vary, though, and you should check several different loan sources to find the best mortgage interest rate for you.  Places you might check for competing loan rates are banks, credit unions, or mortgage brokers.

You need to have a savings account, and you cannot have touched that money for 3 months.

Actually, you can add to your savings account, but you cannot let your savings balance fall below that amount you report on your mortgage loan applications—not during the period between applying for the loan and closing on your new home.  You also cannot have dropped below that reported savings level for the three (3) months prior to applying for that loan.  Lenders want to know that your savings balance is not a fluke while you were on your “best behavior” but rather a solid reflection of you being dependable.

If you receive a gift that helps you buy a home, you will need to provide several forms of proof.

If you will be receiving a gift to help you afford to buy your home, you will need to prove (a) the money gift came (or will be coming) from a relative, and you will need to provide proof of the source of that gift.  You will need to be able to provide documentation of that proof.

You don’t just need to make your mortgage payment.  You need to budget for your property taxes, too.

It is important to find how much you will need to pay each year for property taxes for your new home.  Then you need to break down that into a monthly amount.  If you do not do this, you will be expected to pay a large bill that you may not be prepared to pay.  For example, if your annual property taxes are $4800 per year, then you will need to set aside $400/month in addition to your mortgage payment.

This will help you understand whether you REALLY can afford your new home.

Take time to know your new area before buying a home.

By “knowing your area,” there are several things you might want to check in advance of buying your new home.  Visit the neighborhood during the day and at night.  Check out the schools, shopping, block clubs, neighborhood patrol, and even which utility companies cover your new area.  Finding out this info in advance might save you from buying the wrong property, only for you to figure piece that too late.

Buying a home is not an easy process, but with the experts at Conquest Real Estate Group, you can have a great chance of preparing to give yourself the best chance of qualifying for a mortgage to get that right home you deserve for you and your family.  Call now to learn more or visit http://conquestrealestategroup.blogspot.com/p/first-time-home-buyer-event.html to learn about the next home buyer educational seminar and get more tips.

Call Conquest Real Estate Group for More Info (248) 569-1486