June is HomeOwnership Month
Tips to help you manage the homebuying process
Homebuying season is hitting high gear and we're here to help you make the best homeownership choices in 2018. Working with a certified housing counselor from Home HeadQuarters' Home Ownership Center can make all the difference.
Here's some basics:
1. Check your credit score before looking for a mortgage.
Look at your finances before you start the search for a home. You need to understand your credit score, and what kind of home you can afford. Many people make the mistake of falling in love with a certain house then realize it doesn’t make sense financially. Make sure your credit is strong. Since finding the right house takes an average of one to three months, we suggest signing up for a free, one-hour HomeOwnership Orientation.
First-time buyers, in particular, need to be prepared for all of the steps in the homebuying process. According to a recent study conducted by online loan marketplace LendingTree, nearly one out of every ten mortgage applicants gets denied. The primary reasons for denial were credit history (which includes credit score) and debt-to-income ratio. Each of these factors was responsible for 26 percent of denied loans.
2. Shop around for the best mortgage
Proactively compare services and costs. First-time homebuyers often realize they have choices and resources available to them. Doing your homework can help you choose wisely and save you money. The price of failing to do so can be quite significant after several years. The average borrower could save $1,500 over the life of the loan by obtaining an extra rate quote when applying for a mortgage, according to a new report from Freddie Mac. More than $3,000 could be saved by getting five quotes.
As important as it is to obtain the best mortgage rate, it’s also crucial to be aware of fees charged by mortgage lenders. These fees go by various names and can be confusing.
3. Choose your house carefully.
With a mortgage-approval letter in hand, it’s time to find your home. A market with low housing supply requires a buyer to look for a “diamond in the rough”—a not-so-perfect house that could be rehabbed to make it suitable. That doesn’t mean you should settle for a house that doesn’t meet your basic needs. Keep your list of must-haves front and center, but make sure they are not really “nice-to-haves.”
4. Negotiate.
Unless you’re buying in one of the most competitive markets, there is always room for negotiation. Here’s where selecting the right real estate agent pays off. Whether it’s the price of the house (probably the most important item to negotiate), the portion of closing costs to be paid or whether a warranty for major appliances is included, presenting the seller with a list of requests is important. Remember, the seller wants to sell and you want to buy. Home purchases that are mutually beneficial are made in the middle.
Here's some other helpful resources:
Home HeadQuarters First Mortgage Financing - As little as 2% down and not only for first-time homebuyers.
CNY Affordable Realty - the ONLY non-profit realty in CNY!
NeighborWorks America - The National experts on HomeOwnership! Home HeadQuarters is a proud, chartered member of NeighborWorks America.