HOMEBUYING TIPS
BUILD YOUR TEAM
Hire an agent.
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This is a major purchase and you want a professional guiding you through this process.
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A real estate agent can often send you new listings prior to these homes officially hitting the market.
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An agent can advise you on overpriced listings and help you properly negotiate the home price.
GET PRE-APPROVED WITH YOUR LOAN OFFICER
There is a big difference between being pre-qualified and being pre-approved.
Being pre-approved means a licensed loan officer has reviewed all of your financial information and has determined with you the price range in which you can afford and the amount they will lend you.
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This is crucial. There is no need to waste time looking at homes you cannot afford to purchase.
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This also give you the opportunity to shop interest rates to ensure you are getting the best deal.
THE DOWN PAYMENT - DO NOT DRAIN YOUR SAVINGS
Having 20% down payment is not required.
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There are many programs where you can put down as little as 3.5%.
A common mistake a lot of first time homebuyers make is using all their savings on the down payment.
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If you use all of your cash on hand for the down payment then you have no emergency savings to fall back on.
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There are down payment assistance programs available that will allow you to receive a down payment assistance loan while keeping your money in savings. Ask your loan officer about assistance programs.
FOLLOW A ROADMAP TO SUCCESS
Do not make any large purchases.
For the 3-6 months prior to buying a home, do not make any large purchase. Your lender needs to see that you are reliable in order for you to get the best loan possible.
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If you have amassed a large amount of credit card debt, furniture loans, incurred debt for appliances, or bought a car, this could significantly change your credit rating.
Be clear about the home AND neighborhood that meets your needs.
Finding the perfect home in a neighborhood you do not like is a recipe for disaster. Where the home is, is as important as the home itself.
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Ask your real estate agent about the crime statistics and school ratings of any home you are interested in.
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Visit the neighborhood often to get a true feel for it.
DO NOT MAKE PURCHASES BASED ON EMOTION
Buying a home must be a rational decision, not an emotional one.
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This is one of the largest financial investments you will ever make.
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Ignoring major issues with the home because you love the backyard is not going to yield long term happiness.
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Speak with your real estate agent about your needs versus your wants and make a list.
- Be rational about your list and ensure any home you make an offer on has all of your “needs” met.
Stick to your budget – overpaying because you have fallen in love with a home will lead to unhappiness in the long term. Being able to comfortably afford your home must remain a top priority.
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Download our Roadmap to Homeownership and keep it with you while you attend open houses and scheduled showings!
STAY THE COURSE
- Buying a home is a process that takes months – anticipate this and try not to be frustrated.
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You will likely have several back and forth negotiations with the seller – this is very normal.
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Remember to keep the end goal of being a homeowner in mind every step of the way!
ROADMAP TO HOMEOWNERSHIP
