Sounds simple enough.
Then you start browsing. Maybe on a national home listing site, or you
click on a social media ad. You save a
house or two as a ‘favorite’ and you keep going back to look at it. You drive through the neighborhood, look at
the house from your vehicle and think, “yeah”.
But buying a house is a process. And over the years it has gotten much more
complicated. It’s a little less complicated if you can buy cash, e.g., no financing,
but there are still a lot of ‘gotchas’ out there. And with a big ticket item, the ‘gotchas’ are
more expensive.
Step 1 should always be to see what you can afford. You don’t have to buy for the max, but know
where your comfort level is at. Prices
vary greatly even within the same zip code.
TALK TO A LENDER. I recommend you
get at least two opinions, from two different kinds of lenders. There are regional banks, local or community
banks, credit unions, and mortgage brokers from which you can choose.
They offer different kinds of financing programs. Some have
a limited number of loans and you will have to ‘fit’ into one of them. Other
lenders have a wider variety of loan programs and you will have more comfort
and choice in deciding which suits you best.
It’s as important to know that you qualify for an FHA loan (but not a conventional
mortgage) as it is that your maximum price is x thousands of dollars. Or that
the Rural Development Home Loan you want is good in certain areas but not
possible in others.
Realize that different loan types may require additional
inspections which will be more out-of-pocket expenses. If you do get
pre-approved (which I highly recommend), be sure that the loan officer has run
a credit check, not just taken your verbal answers. There are people who get to
the point of making a formal loan application and then they discover an old or
erroneous blemish on their credit which will take time to resolve – and they
lose that perfect house.
Come back next week for the next step.
Image courtesy of Stuart Miles/freedigitalphotos.net
Robert
Smith is a licensed real estate agent in Michigan and has worked at Preview
Properties, PC for 20 years. Real estate
law and lending regulations can vary from State to State. This blog and its
posts are not intended as legal or financial advice.
