Buying a home is a long and tedious process that involves a lot of tasks, steps, and meeting a lot of requirements. Besides finding the house of your dreams, you also have to work towards finding a suitable mortgage from a good lender.
To make the process easier and increase the chances of getting a suitable mortgage and the best house, here are some things you should do.
Have Good Credit
Lenders evaluate your ability to pay by checking your credit score and credit history. A high credit score helps you find a lender easier, increases the chances of getting a bigger loan, and helps you find lower interest rates on the loan.
There are several online platforms to check your credit scores, like Equifax and TransUnion. The best credit score is usually above 620, which could differ from lender to lender. To increase your credit score, you can settle some outstanding loans, pay your bills on time, or reduce your credit card debt.
You should also look up your financial records and correct any mistakes hurting your credit score. If you have a credit score ranging from 500 to 600, you can still get a loan insured by the Federal Housing Administration.
With an FHA loan, you can pay a down payment of as low as 3.5% if your credit score is 580 and above. Otherwise, you have to pay a 10% down payment. Lenders also look at your debt-to-income ratio. This value represents the amount of your gross monthly income that you use to pay off debts.
The lower the ratio, the better. Most lenders require that you have a maximum ratio of 43%.
Have a Realistic Budget
Before diving into the market to look for a house, consider your financial health and your budget for the home. Consider your cash flow and whether you can manage to pay for the house while meeting all your other financial needs.
When calculating a budget, include the down payment, closing costs, insurance, inspection, and appraisal expenses. Also, if you hire a realtor, have that in the budget. The prices will vary depending on the size and type of house you want, plus the location.
You should also research and study the real estate market, especially in the location you want to buy, and determine the season when house prices are the lowest. To avoid financial strain, experts recommend that you open a savings account at least six months before starting the journey to look for a house.
This will make it easier to pay a larger down payment, which will reduce your monthly payments in the long run. You also have to have money left in your bank account because most lenders ask for that to help them evaluate how capable you are of paying the debt.
Have a Good Realtor
Going on the house shopping journey alone makes it harder and longer, especially for beginners. A realtor is a professional who will help you find the best home for sale in Buckeye that suits your needs and is within your budget.
They will also give you helpful information and advice about the buying process, makes the best offers, and negotiate with sellers on your behalf. Some of the tips for finding a good realtor include:
Consider Their Education and Certifications
Realtors must complete their education and get specific training before becoming certified realtors. Ensure that they attended an accredited institution and completed all the necessary training.
You should also ensure that they are part of the National Association of Realtors, which sets out a code of ethics they should abide by. The NAR database will also help you see if the realtor is licensed and if the license is updated.
Some realtors also have certificates indicating completion of different levels of training, like Accredited Buyer’s Representative, Certified Residential Specialist, and Senior Real Estate Specialist.
Consider Their Experience
Ask the realtor how long they have been in the real estate market, how many houses in the neighborhood or similar to yours they have closed, and how many clients they have worked with who have similar house needs and budgets.
Experience ensures that the realtor knows a lot about the market trends of the location you want to buy and can negotiate with sellers.
Interview a Few Realtors
Once you have spotted a few potential good realtors, consider interviewing them in person or over the phone. This will help you gauge their communication skills and availability.
Request for references
Realtors sometimes could say they have worked with many clients to impress clients. To confirm the claims, ask them to give you the contacts of a few previous clients. Legit realtors will have no problem giving you the references, but if you notice hesitation, that is a red flag.
Talking to the clients will help you know how dependable the realtors are and any issues the clients encounter working with them. You should also ask the realtor to show you some photos of houses they helped acquire and their locations.
Check Online Reviews
In addition to talking to previous clients, you should also check online customer reviews and ratings the realtor has. You can do this on platforms like BBB, social media platforms, or relators’ online platforms.
Ask Friends and Family
If you are finding it hard getting a good realtor, ask friends and family who have bought houses in the past.
Sign a Contract
Once you find a realtor you are ready to work with, ensure you sign a well-written and detailed contract. It should include the realtor’s payment, their availability, and the contract period.
Get an Inspection Done
An inspection is the best way to ensure that you get a house that matches the price. It allows you to see any issues the house might have before buying, allowing you to negotiate with the seller on repairs.
Some sellers repair the damages before you buy, but others don’t. Before the inspection, experts advise having an inspection contingency that allows you to cancel the deal if you find any issues with the house that the seller is not willing to repair.
Some of the things a home inspector looks at include:
- HVAC system
- Roof and rain gutters
- Electrical systems and plumbing
- Attic and insulation
- Structural components
You should not be worried by the number of issues the house has but the severity. Some problems are not usually serious, and you can find affordable repair services.
The inspection period depends on the size of the house, the inspector’s thoroughness, and the number plus extent of issues. To ensure accuracy, you should attend the inspection and ask the inspection officer anything that catches your attention.
Home buying is not easy or cheap, but good preparation can make it easier. Ensure you look for a home within your budget, find a good realtor, improve your credit score, and get the house inspected. You can also have the house appraised to get the best deal.