Now that the Covid 19 vaccine has rolled out, the economy is coming back and more people feel comfortable buying a home. According to Freddie Mac, interest rates are still historically lower than they've been in over 50 years. If you're one of those looking to purchase, there is a process to prepare yourself to purchase. If you follow these step-by-step guidelines, you're sure to experience a positive outcome.
Job Security and Savings
The criteria mortgage lenders look at first and foremost is job security. The Federal Housing Administration (FHA) states that lenders must verify a borrower's last two years of employment. If there have been any changes or gaps in employment, they must be satisfactorily explained. Buyers must also have money in the bank for the down payment and closing costs.
Initial Consultation With a Mortgage Lender
Start with an initial consultation with any mortgage lender. Different loan programs have different credit score criteria. Talk to her about the income you need for your wants and needs. Discuss your savings and any investments you have with the lender. Discuss your debts such as credit card balances, student loans and medical bills. The lender will give you an initial idea of what you can afford, what you may need to do to qualify for the home of your dreams and what type of mortgage will best suit your needs.
Position Yourself for the Purchase
Act on the advice given during your initial consultation. Pay off or down some of your credit card balances, clean up your credit history if needed and save more money. Don't make any large purchases that will negatively affect your credit or bank account balance.
Select a Mortgage Lender
Now it's time to select a mortgage lender and begin the process. You'll need a pre-approval letter before you start looking for homes with a real estate agent. When searching, consider interest rates, points and overall costs of the loan. If you're a veteran, find a mortgage company that specializes in VA loans such as Veterans United Home Loans. If you feel comfortable not using a traditional, personal lender, you may also want to consider an online lending company such as AmeriSave Mortgage, Rocket Mortgage by Quicken Loans or VAloans.com.
Find a Real Estate Agent
As this may be the largest financial transaction of your life, you'll need to find a good fit with your agent, one that you can effectively communicate with. Interview agents and select one that best matches what you are looking for in an agent. Find one who knows the area's home values well. Consider an agent that specializes in working with buyers such as an accredited buyer's agent (ABR). Not familiar with a local agent and don't have a referral? You may want to consider the alternative to a traditional agent with an agent matching service. These sites match your priorities to an agent's skill set.
Once you've hired your agent, he/she will send you listings that meet your criteria from the multiple listing service (MLS.) You can also search popular real estate websites such as Homes.com, Realtor.com, Zillow.com and others. When you find the home, you can envision yourself living in, make an offer, negotiate it and fully execute a contract.