Here are a few weekly home buying tips.
5 Home Buying Tips
- Credit – I don’t know if I can buy with my credit.
For an FHA Loan the minimum FICO Credit score is 580. If you are quite there don’t get discouraged, there are things you can do to help your credit fairly quickly. Many lenders work with debt consolidators and know tricks and tips to improve your credit. If you are in a rush to find your dream home than you can always get a co-signer.
- Cash – How much cash do I need to buy?
Remember the old saying cash is king, well when buying a home this may not necessarily be true. With a plethora of loan programs available it is possible to get into a home with little to no money down. For general education, FHA is a minimum of 3.50% down, VA is 0%, and conventional in most cases is 5% minimum. Closing costs can range anywhere from 1-1.5%. Things are always changing and this information should be double checked with a lender.
- Team – How I can I benefit from a good sales team?
A good sales team isn’t just your Realtor! A sales team is made up of your Realtor, Escrow/title, and lender and in most cases the selling agent. A “good” Sales team is one that works well together has constant communication and can anticipate issues before they arise. If your realtor can’t tell you who they work best with and has outstanding relationships with title and lenders get a new realtor!
- Non negotiable list – Things I can’t live with.
As a realtor I think it is unfortunate to see someone have to cancel a home purchase for any reason. There are certain situations where a purchase must be cancelled due to change in job or finances, but when a deal is cancelled because the house isn’t perfect this can pose a problem. It is important to know what you want and don’t want and these things do change, however having a non-negotiable list can come in handy. Knowing what you can’t live with can help mitigate future problems and potential loss of earnest money.
- Budget – I want to buy on a budget.
Figuring out what you can afford can seem overwhelming. I recommend instead of looking at price, let what you are comfortable spending each month dictate what you can afford. When switching from renting to ownership there are many new expenses to calculate, i.e. water, trash, HOA (if applicable), sewer, gas, electric, property taxes (usually calculated in the mortgage), and insurance. It is also important to remember first months expense will be higher due to closing cost, but you are not expected to pay your first mortgage payment until the second moth which can help alleviate some pressure.
Hopefully you have found these home buying tips useful.
What other home buying tips have been helpful for you?