The process of buying a home can often feel like training for a marathon. You must train for the big event by becoming more disciplined in your spending habits and trimming excess debt. You must become knowledgeable about the course by researching home and loan options, finance and credit and other stops along the way. You have to assemble a training team which may include a realtor, mortgage broker and other professionals. And finally you have to prepare to go the distance to cross the finish line which is closing on your home.
|
If you have never run a marathon, those 26.2 miles may seem like 50 at the start of your training. However with the right preparation and tips from those who've run the distance, your race becomes a little easier. You still have to cover the distance one step at a time, but you can cover it faster and with greater ease.
|
We hope that the home buying tips below will help you as you journey through the process.
|
• |
Get pre-approved. Taking time to acquire a pre-approval strengthens your positions with sellers but offers other advantages. The pre-approval process provides an opportunity for you to learn about the types of loan products for which you qualify. This knowledge will facilitate your comparison of loan packages and options.
|
• |
Research rate-lock options. It is worthwhile to look into rate lock options. The lock time refers to the time between when you agree on a mortgage rate and when you go for settlement or closing. The shorter the lock time, the lower the interest rate you might be able to lock into.
|
• |
Discuss Negotiable Lender Fees. Talk to your lender about negotiable lender fees. When you buy a house, there are always extra fees such as underwriting fees, processing fees, or commitment fees. Many lenders will be happy to work with you in negotiating these fees, saving you money.
|
• |
Go for a quick close. Quick close is where if you agree to close quickly to help the seller out, they will agree to cut percentage points. Some sellers may be simultaneously selling their old home while buying a new home and a quick close could be in their advantage.
|
• |
Good credit does count. Buying a home with less than stellar credit is possible, but you will pay the price in higher interest rates and fewer loan and home options. Good credit truly provides you an advantage when buying a home. Good credit scores enable you to negotiate better rates, inspection fees, commission and even points. Talk to a financial advisor and plan a course of action to begin improving your credit. The extra effort will be worth it when it is time to shop for a home.
|
• |
Consider all loan options. Many borrowers only consider fixed rate loans. Do not be afraid to look at a Variable or Adjustable Rate Mortgage (ARM). With variable rate mortgages, your payments will fluctuate somewhat, but you will also enjoy lower monthly payments. You may find that after weighing all of your options, the variable rate is right for you.
|
• |
Ask about quick loan processing. Quick loan processing is offered by some lenders and you can be approved in as little as five to seven days. If you are in a hurry, this is a great option and might even save you a step in the moving process. For example, if you have to move from your current residence before you've closed on your new home, you may have to move into temporary housing for a month or two. However, with quick loan processing, it's possible to get the processing done quick enough to eliminate the need for the temporary housing step.
|
• |
Pay Points. Paying points is if you are willing to pay some of the interest up front. This would allow you to get a fixed-rate mortgage at a lower interest rate.
|
Finally, begin with the end in mind. For a brief period of time, buying your new home may feel like an extra part time job. There is however, a payoff to all of the evenings and weekends devoted to house shopping - the wonderful memories you will create in your new home.
|
My goal is to
