Buying a home can be a daunting process. Nobody wants to pay too much or go through a troublesome lending process. There are lots of tricks that you can put into practice to make sure that not only will you get your dream home but that the process of getting it is as painless as possible.
As soon as you decide that you want to buy a home, before you even go to look at properties, you need to make sure a few things are in order.
Find all of your paperwork—receipts, bank statements, no matter how trivial you might think it is, get it all together and get it organized. When applying for a home loan, your lender will want to see a clearly defined paper trail of your spending habits. Your paper trail will show your lender what you spend money on, how often you make major purchases and how long it takes to pay for those purchases.
Your lender may also want to see your account statements. These statements aren’t just limited to checking and savings accounts. They will also want to see statements for mutual funds, stock statements, money market funds, certificates of deposit and even your 401K and retirement fund accounts. These statements will show how often, if ever, you move funds between accounts and a large amount of movement could be detrimental. It is also not a good idea to consolidate accounts until after you’ve applied for your loan. Keep in mind that the more often money is moved and the more paper there is to search through, the longer it could take to get the loan approved.
It’s also not a good idea to change jobs until after you’ve bought your new home. This is especially true if as you switch jobs you move to another form of pay schedule—for example, if you move from a salaried position to a commission based position. Changing jobs can make your lender worry about your earnings in the future. They like to, especially in the case of commission or bonus based employment, see a stable history of earnings.
Self Employment should not be pursued until after your new home has been secured. If you are self employed, lenders like to see two years worth verifiable income. If you can’t provide that, you might not get the loan you’re applying for.
It’s tempting to look for a foreclosed home because foreclosed homes can often be bought for a much lower price than a new home. There are lots of myths about foreclosed homes being bought for outrageously low prices. The truth is that while you might be able to find a home much lower than market value (if you’re incredibly lucky), most foreclosed homes are closer to the 5 percent below market value range. There is also a considerable amount of work and research to be done if you want to buy a foreclosed home. It’s often a harder process to navigate than that of buying a new home. It could also mean settling for a home that is in need of repairs or in a neighborhood that is less than exemplary.
There are many ways to find great deals on real estate. Some of these are more “grass roots” than you might have thought. Enlist a top realtor who will work closely with you and that knows the area inside and out. Do your research on the properties you are interested in, foreclosure and regular market buys. Sometimes you may find out about liens on the property, or information about needed repairs that can lower the price of the home.
There are plenty of ways to ensure that you don’t pay too much for your new home. By proving that you are financially stable and earning a lower interest rate on your mortgage or doing research and being able to lower the price of the property, all it takes is some time and effort to make sure that owning a new home stops being a dream and becomes a reality.
The Agency Relationship
This video helps you understand the Agency Relationship that can be created between you and your Realtor, allowing them to represent your interests.