For most Americans, buying a home is the single most important investment they will ever make. It is for this reason that the home buying process should not be taken lightly. In fact, there should be a great amount of thought, research and careful planning when seeking to purchase a home. People seeking to purchase a home in Huntsville have the distinct advantage of looking for property in a beautiful area that encompasses great properties. And if the following steps are followed, you can have a successful experience buying a home.
Knowing Your Credit Score
This step will determine whether or not a potential buyer will be able to move forward in the home buying process. Your credit score will play a large role in determining what type of mortgage they will be approved for, if at all. A low credit score does not necessarily mean that a person will never be able to purchase a home. However, what it could mean is that person may have to do some things to repair their credit before beginning the home buying process. Generally speaking, credit scores in the mid 600’s and up are those that are able to be approved for a mortgage.
Know What You Can Afford
Once you have found out your credit score, the next step is to determine how much of a mortgage payment you can afford. This will determine what type of property and the price range you will seek in your home search. People must take into account the expenses they currently have such as student loans, car payments, food, etc. — and compare it to their present income and future income potential. Then potential home buyers must factor in not only the mortgage of their potential new home, but also the cost to upkeep it. Generally speaking your mortgage payment should not exceed more than 30 percent of your monthly gross income.
Connect With the Right Real Estate Agent and Lender
The right real estate agent can make the home buying process a smooth transition- as they act as the point person in locating homes that suit the potential buyer’s desires. You should do careful research when seeking a real estate agent and lender. A great way to do this is to ask people they know who have purchased homes in the state where they are looking. In this case, try to seek people who used agents in Alabama they were completely satisfied with. Ask questions about all facets of their experience. If potential Huntsville home buyers do not know anyone who has recently purchased a home, then they can connect with people on online blogs to read testimonials.
Having the right lender can be as equally important. The right lender will work with the potential buyer’s financial situation to assure them a mortgage suitable for their situation. To talk to one of our featured lenders, contact us today.
Seek the Home Right for Your Situation
When searching for a home there a number of factors to consider about the property itself: How much yard work does a person want to do, how much house repair is needed, the neighborhood, and amenities. Every potential home buyer should make a list of all they want and do not want in a home and neighborhood. Buying a home is not like buying an outfit that can be returned to the store. Home buyers must be sure that the property they are purchasing is exactly what they desire and suitable to their needs.
Once a potential buyer finds a home they desire, they can place a bid on the home. Starting a bid at the asking the price is never a good idea. You should leave yourself room to negotiate. However, you should not start the bid so low that you turn off the seller. Generally a bid 5%-7% less than the asking price is a good place to start. Also, potential buyers should be prepared to go over the asking price about 5% should there be a bidding war that begins with other suitors.
The Right Mortgage
There are different mortgages that you can be approved for. Conventional loans generally seek a 20% down payment. However, if the buyer is not able to place 20% down, they can put a lesser down payment but will have to pay for mortgage insurance [Read: How to Save for a Down Payment]. There are also mortgages for first time buyers and veterans that benefit potential buyers in both categories. To learn more, speak with our mortgage adviser.
Before you can close on a home there will be inspections done on the house. The mortgage company will do their assessment to ensure that the home is worth the asking amount of the mortgage. The buyer has an inspection done in order to ensure that the home does not have problems that will cost them a great deal of money to repair. Both inspections are vital to the closing process.
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If a you follow these steps you will have a successful experience in purchasing your dream home.