The Home Buying Process
Before You Buy
Preparation is key when purchasing a property. From down payments and mortgage prequalification to understanding the type of home that will meet your needs and satisfy your wants, I can make sure your financial ducks are in a row and your expectations are grounded in reality when preparing to buy.
The Search
Selecting your perfect home will require research, expert guidance and knowledge of the local market, and you'll need to consider what it is you're looking for. I can help you find the place that fits your taste, your budget, and your lifestyle. I'm a home hunter's best friend.
Making the Purchase
So, you've found the perfect home that meets all your criteria, from a great location to just the right square footage. As your trusted agent, I will guide you through the logistical — and emotional — challenges of the purchase process, to ensure you are in a solid position before you sign on the dotted line.
Learn the steps you need to know when buying a home.
- Get to know yourself - Know Your Credit health....pull your credit report. You should obtain a copy of your credit report before starting the home buying process. You will see what your credit profile looks like to potential lenders and can then take steps to improve your credit score if necessary. it’s smart to check your credit report. By law, you can get a free report once a year through www.Annualcreditreport.com . The report pulls data from the three major credit-reporting agencies: Equifax, TransUnion and Experian. Having the information in hand before you talk with a lender lets you dispute any errors in the reporting. Based on your credit report, Fair Isaac & Co. (FICO) assigns you a credit score ranging from 350 to 850. The higher your credit score, the lower the interest rate on your mortgage. Scores are based on:
- Payment history: Have you paid your bills on time?
- Amounts owed: What is your overall debt?
- Length of credit history: How long have you been borrowing money? Mortgage lenders like to see a long credit history.
- New credit: Have you applied for new credit?
- Types of credit: Lenders like to see a variety of types such as bank cards, car loans and student loans.
2. So what is a good credit score? You can expect a good mortgage rate at anything above 720. Home buyers who pursue an FHA loan can usually secure a loan if their credit is 620 or over. FICO scores are available at www.myfico.comfor a one-time or monthly fee. Once you know your score, you can find out what interest rate you will likely qualify for. Creditkarma.com is also a great resource it tracks your credit history and scores all in one place.
IMPROVE YOUR CREDIT
Improving your credit score will help you obtain a better interest rate, and therefore, lower your monthly mortgage payment. To improve your credit score, Credit Agencies recommends taking the following actions:
- Correct any errors on your credit report by contacting the reporting agency
- Reduce or pay off any debts you have
- Establish a history of making all your payments on time
- Continue to use at least one credit card and pay it in full each month
- Avoid changing jobs or taking out any new loans
- Ask lenders to reduce any large credit lines you have to trim your potential debt. Your DEBT to INCOME RATIO should conservatively be around 30%-35%.
It can take anywhere from a few months to several years to improve your credit score. But once you establish good credit habits, the negative information will eventually be deleted from your credit report and replaced with positive information that will make you look more attractive to lenders.
- Develop a BUDGET - Sit down and write down all your expenses and add up your income subtract your expenses from your income (INCOME - EXPENSES = NET INCOME)
- Save for down payment - Each week/every other week/twice a month/once a month make deposits into a saving and/or checking account that you plan to use to show lenders your monthly spending and savings habits. Make sure to make rent payments on time each month on the 1st, and have your paycheck deposited into this account also. Lenders will want to see your rent payments and where you deposit your income/paycheck.un
- How much home can you afford? Gross Income x 33% = This amount is the most you should pay for mortgage payment. To keep it safe 28% of your NET INCOME. Will have you in a comfortable place.
- Find the best mortgage broker/Financing Bank shop for the best rates. Pre-approval requires the lender to pull the credit information (see Step 1) and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you. If you get in a multiple-offer scenario, being pre-approved may give you an edge because the seller will have more confidence that you will be approved for a loan large enough to purchase their home. You are not obligated to get a loan from the lender who you get a mortgage pre-approval from. When it’s time to officially apply for a mortgage, it’s best to get loan estimates from at least three lenders to compare their interest rates and fees.
- Start Looking At Homes
Let the serious shopping begin! By now you’ve talked things over with ME (your agent) and you will have a good idea what you really want and need in a home. Armed with this, your price range and my knowledge of the Massachusetts market, you can begin to look at listings online and we can come up with properties for you to tour. Chances are you’ll discover some new things to love or hate about homes and refine your search
Find Out What You Can Afford
Click the button below to access a helpful loan calculator — just the tool you need to get a general idea of your home search budget. When the time is right, I can connect you with a trusted lender to begin the preapproval process — a critical first step toward making a smart, solid offer on your dream home.
