Use this "Loanopoly" infographic as your guide for the home-buying process
Before getting a mortgage or any kind of loan, you should always check your credit. According to the law, you're allowed to receive one free copy of your credit report per year. You can do this by visiting www.annualcreditreport.com or www.creditkarma.com. Scores range from approximately 300 to 850; generally, the higher your score, the better loan you'll qualify for. Don't forget to check your report for errors. If there are any, dispute them. It may help your credit score.
You can calculate how much you can afford by starting online. There are several online mortgage calculators that will help you calculate an affordable monthly mortgage payment. Don't forget to factor in money you'll need for a down payment, closing costs, fees (such as fees for an attorney, appraisal, inspection, etc.) and the costs of remodeling or furniture. Remember that you don't always have to put down 20 percent as your parents once did. There are loans available with little to no down payment.
One of our exceptional multilingual home loan (mortgage) lending partners can help you understand all your loan options, closing costs and other fees. Ask lots of questions and to ensure that they have answers that satisfy you. Make sure to find someone that you are comfortable with and who makes you feel at ease.
Once you have the right mortgage lender, make sure you get a pre-approval letter. Pre-qualification letters are only a guess based on what you tell the lender and are no guarantee, whereas a pre-approval will give you a clear understanding of how big a loan you qualify for. The lender will actually verify your credit and get more information about you. That way, when you're ready to make an offer, it will make the sale go much quicker. In addition, and just as important, your offer will look more appealing to the seller than other buyers since your financing is pre-approved.
Make a list of the things you'll need to have in the house. Ask yourself how many bedrooms and bathrooms you'll need and get an idea of how much space you desire. How big do you want the kitchen to be? Do you need lots of closets and cabinet space? Do you need a big yard for your kids and/or pets to play in? Don't forget to think about the kind of neighborhood you want, types of schools in the area, the length of your commute to and from work, and the convenience of local shopping. Take into account your safety concerns as well as how good the rate of home appreciation is in the area.
An experienced real estate agent can be a tremendous help and save you time and frustration in this process…
Now that you've found the home you want, you have to make an offer. Most sellers price their homes a bit high, expecting that there will be some haggling involved. A decent place to start is about five percent below the asking price. You should certainly use a local agent, expert in the area, to best advise you regarding offer strategy. Once you've made your offer, don't think it's final. The seller may make a counter-offer to which you can also counter-offer. But you don't want to go back and forth too much. You have to meet in the middle if there is to be a deal on this property. Once you've agreed on a price and your offer is accepted, the seller’s attorney will prepare a contract and forward it to your attorney. If the inspection has raised any issues they will be resolved at this point and the contract will be signed by you, the buyer, and forwarded to the seller’s attorney for the seller’s signature. You are getting close to owning your own home!
Setting a closing date that is convenient for all parties will take some time and will be dealt with by the attorneys representing each party. Be sure you talk to your attorney & mortgage lender to understand all the costs that will be involved in the closing so there are no surprises. Closing costs will likely include (but are not limited to) your down payment, title fees, appraisal fees, attorney fees, inspection fees, and points you may have bought to buy down your interest rate.