Buying a home is a challenging process that usually ends when the parties involved in the transaction can achieve a win-win scenario. In other words, it requires people to agree on everything from the price of the property to the actual state of the home. Expectedly, it can be quite tricky, and it comes as no surprise that there is an entire market of workers dedicated to helping oversee these dealings.
A residential real estate expert from Homelife Eagle Reality, Hans Ohrstrom, is a great example of someone who navigates complex transactions. According to him, the perfect outcome is primarily dependent on clear communication between both sides. Nevertheless, there are many more tips that first-time buyers should consider.
The Best Time to Begin Saving Was Yesterday
A common rule-of-thumb is to save at least twenty percent of the home’s value before asking for a mortgage. In reality, however, the 20-percent rule has become a little more flexible, and some banks now approve loans even when the buyer does not have this exact amount. Of course, this is also true of the vice-versa scenario as many banks require more than just 20 percent.
To be prepared to make the proper down payment, one will have to consider their credit score and spending history. This is the same information that lenders will use to determine their offering. So, given that the financing can be unpredictable, it is crucial to begin saving as soon as possible. Doing so will allow one to accumulate a maximum amount of money before the purchase and, in turn, have some back-up capital in place from the beginning.
Be on the Same Page with Your Realtor
Obviously, Hans Ohrstrom advises everyone to get a realtor. Although people could technically navigate the process themselves, no first-time buyer is going to be able to do that effectively. The reason why is the fact that realtors spend years learning how to do their job and online research is generally not enough to replace them. Moreover, it is vital to be on the same page as your agent. After all, this is the individual who will find the homes that fit your specific criteria. Thus, describing that criteria to them in as much detail as possible will increase the chance of them finding the perfect home.
Stop Doing Things That Will Negatively Affect Your Credit
Since banks heavily rely on credit reports, it would be a good idea to spend some time building credit before the mortgage application. For those unfamiliar, this means paying off any credit card balance, getting rid of collections that may be adversely affecting the score, and similar. Most importantly, however, one should stay away from any credit-based endeavors that will show on their report for a while.
This means that people should not look to open up new credit accounts right before getting a mortgage. The reason why is the fact that every time one does something similar, their score may go down due to the hard inquiry that financial institutions use to approve new clients. And although those points can be regained within a few months, it just delays the mortgage process.
Do Not Rely on a Single Opinion
After finding a home that fits your criteria, it is crucial to get a second opinion. Even though the homeowner could be honest about everything, double-checking all of their claims is relatively easy. In fact, all one has to do is consult with a third-party who may be able to verify the home inspection results, state of the property, price valuation, and so on. Also, it could be useful to hire more than just one realtor to simply check if the other person can find something that fits the client’s criteria even better.
Think About Your Future
A lot of new buyers make the very common mistake of not thinking about their future. So, instead of buying the home that they will need a few years from now, they buy something that fits them in the present. For instance, a young couple may be perfectly fine with a two-bedroom house. If they have children, however, that house could end up being too small for their needs, and they will need to relocate. These types of decisions must be analyzed beforehand, and one should always buy based on their upcoming needs.