Читать книгу SMART ESSENTIALS FOR BUYING A HOME - Amy J. Hausman - Страница 7

1. Check your credit before you apply for a loan. Before you apply for a mortgage and start touring homes, make sure your credit is in good shape. You can get a free look at your credit reports from the big three credit reporting agencies — Equifax, Experian and TransUnion — by going online to www.AnnualCreditReport.com. (Although the reports are free once per year, you’ll have to pay a small fee to see your actual credit score.) Several months before you plan to apply for a mortgage, do what you can to improve your credit score if it isn’t in the excellent range — 740 or higher. You may need to pay off credit cards, redistribute your debt and/or correct errors in your credit reports.

2. Plan your housing budget realistically. (1) Figure out how much cash you have on hand to put toward a down payment and closing costs. (2) List all the expenses you’ll incur as a homeowner (except your monthly payment for principal and interest), including estimated property taxes, insurance, utilities, maintenance, repairs and new furnishings. (Don’t worry: We’ll show you how to find accurate figures for your situation in Chapter 3.) (3) Add your other regular expenses for car payments and loans, transportation, clothing, food, recreation, medical care, college fees, retirement savings, etc. (4) Subtract the above expenses from income. (5) What’s left over will be the realistic monthly housing payment you can comfortably afford — even if you’re tempted to borrow more and are approved to do so.

3. Gather information. Find out about the home buying process so you’re comfortable each step of the way. How? Keep reading. Then, investigate and review local property data to get an idea of price points, listing-to-sales-price ratios, hottest areas and best places for a bargain. Research schools in the area you are interested in. A wealth of information is available online, at your local library, in books and eBooks about home buying or by contacting a buyer’s agent real estate professional. Although a real estate agent can help guide you through the process, learning the lingo and standard local practices beforehand will help keep the cork on your stress level. Your buyer specialist will provide up-to-the-minute stats of what comparable properties sell for in specific neighborhoods and what impact various features have on price.

4. Get pre-approval for a mortgage before you begin home shopping. In today’s marketplace, touring homes without knowing your buying power is a waste of everyone’s time … especially yours. Getting loan pre-approval eliminates surprises and saves you valuable time. Additionally, home sellers can smell an unqualified buyer from the curb and prefer to work with buyers who already have a mortgage commitment from a lender. Starting out knowing exactly what you can borrow for a home (instead of the wishful thinking a “pre-qualification” provides) will help you narrow your search to the price range you can afford. Finally, being pre-approved for a loan shortens the time to closing or settlement once you strike a deal with the home seller.

5. Select the right loan. If you only plan to live in the home five years or less, you may want an adjustable-rate mortgage, which often carries the lowest interest rate available. Cash-strapped buyers will want to look for a low-down-payment program, but should factor in the cost of private mortgage insurance (PMI). Compare interest rates using APR (Annual Percentage Rate). (More about PMI and APR in Chapter 4 MONEY.) Be sure to calculate how much each option will cost you monthly and during the entire period you’re likely to own the home. Simply put: You’ll need a professional mortgage lender to help you compare different loan products to find which one best fits your financial situation. We’ll show you how to find that lender.

6. List what you must have in a home first, then prioritize your wants. Think ahead. Consider changes that might affect your housing requirements in the next several years. Remember, though, if you’re buying your first home, it doesn’t have to meet your needs or dreams for a lifetime; after building some equity, you should someday be in a position to sell your home and buy another. (More in Chapter 5 SHOP.)

7. Select a top-notch buyer’s real estate professional. Ask friends, neighbors, family members and co-workers for recommendations. Read reviews online. Visit the online presence of the real estate pros you’re considering and check for Facebook and LinkedIn pages. Observe their responsiveness and interactions. Although it’s valuable to talk with several agents first, you’ll be best served working with one top agent you have a good rapport with, one who knows the local market and listens closely to your needs. Hiring a buyer’s agent who will be legally bound to represent your interests in the transaction — not the seller’s — is essential.

8. Don’t buy on impulse. First-time buyers sometimes rush into the first home they find that, at first glance, appears to meet their needs and budget. It’s a costly mistake to choose the wrong home — one that’s too big or too small for future needs; that’s a fixer-upper if you’re not handy; that’s too far from work or too close to traffic; that’s likely to need extensive rehab; or that’s in the wrong price range.

Spend time looking around until you have at least three or four good candidates, then take a closer, deeper look. Drill into what utilities will cost. Consider resale value of the location carefully. (Location is the one thing you can’t fix.) Ask yourself whether your furniture will fit in the home. Research zoning restrictions, homeowners association rules and plans for development/redevelopment in the area. Hiring a professional home inspector is always a good idea to put a fine point on how much fixing-up you’re comfortable with and avoid purchasing a money pit with hidden problems that can cost you major bucks down the road.

9. Be flexible during negotiations. Sellers may have some requirements — e.g., a particular closing date, taking the dining room chandelier, etc. — that won’t cost you much to comply with. Remember, buying a home is not a contest between you and the seller; it’s an agreement that must meet both parties’ needs.

10. Avoid making major purchases or applying for more credit. Your lender will underwrite your loan based on a snapshot of your finances just before settlement or closing. That picture will change for the worse if it appears you’re looking for additional credit or you deplete your cash stash. (We’ll help you avoid some never-do’s that can sabotage your closing at the last minute.)

11. Stay in close contact with your loan officer and real estate agent. Once you sign a contract to purchase, you’ll supply a blizzard of paperwork, purchase homeowners insurance, make appointments for inspections and deal with a dozen other details. Not to mention packing to move! Be sure to ask questions if you don’t understand what’s going on or what you need to do next. That’s why you hired the pros!

12. Buy owner’s title insurance. Most lenders require you to purchase a lender’s title policy to cover their interests in the event that someone else comes forward with a claim to the property after closing or settlement. To protect your interests, you’ll need to buy a separate owner’s title policy.