Every part of a home from its construction to its purchase can be stressful. Builders like Lloyd Claycomb need to have an intimate and detailed understanding of the intricacies of home building and manage each of these from design to construction. When you want to purchase a home, there are a myriad of details that will surely keep you up at night. Here are the key steps to help you avoid some stress when looking to purchase a home.
Step 1 – Calculate How Much You Can Spend on a Home
The most important thing for you to determine when you want to purchase a home is how much home you can afford to purchase. This is really important to do first so you do not go out and fall in love with a home you have no chance to buy. To determine what you can afford, you need to look at the incomes of whoever will be contributing toward the payments of the home. You then need to look at the expenses these parties currently have because this will be calculated into what home you can afford. The Internet is a great place to use to locate calculators that can give you a glimpse of your home mortgage. These free calculators take into account your income tax and expenses and can base your monthly mortgage on the likely mortgage rates you should expect to pay. They also include other expenses that accompany home ownership including insurance and taxes. You will also need to add in additional costs that will not be included in this calculation. You should expect to cover additional utilities, landscaping costs, costs for repairs any home owner association fees and have an additional budget for miscellaneous fees. You should be realistic about your actual costs and use this as an indication of what you can afford to buy. Many people underestimate and find that they get rejected by mortgage companies who will be very strict about costs relating to owning a home. So get a jumpstart and be very strict as well. Once you have determined how much you can spend on a house, you can then know what homes you can entertain.
Step 2 – Hire a Real Estate Agent
Your home will be the biggest purchase you make in your entire life and in order to get it right, you need to enlist the assistance of a professional. This means hiring a reputable real estate agent. Some people say this step is a matter of choice, but the knowledge about the entire process that real estate agents possess will always bring you benefits either in time or money savings. Additionally, a real estate agent will be able to answer important questions, direct you to the best homes, help you find reputable companies to work with during the process, including; mortgage lenders, title companies and inspectors, and help you make the right offer for a property and then negotiate with the sellers on a price. When you combine all of these factors, hiring a reputable real estate agent is the smart choice.
Step 3 – Get Pre-Approved for a Home Loan
Getting pre-approved for a home loan is crucial when looking to purchase a home. There are so many stories of couples falling in love with a home and being sure they can purchase it only to find that no mortgage company will approve them for the loan amount. Their surprise is usually based on the fact that they have a good income and credit history. What you need to know is that the criteria for approving a home loan is long and detailed and changes constantly. The only way you can be sure of what you will be approved for is to actually go through the process of getting approved. So you need to meet with one or more lenders and walk through the process first. Use these meetings to find any weak spots in your credit, expenses or income that can be fixed and potentially improve your chances of getting a higher loan amount or a better interest rate. When you get through this process, the lender will give you pre-approval paperwork that you can provide to realtors and home sellers in order to show them that when you make an offer you can in fat get the loan to close the deal. It puts you in a power position with sellers and also allows you to negotiate better terms for the purchase.