How To Buy A Home Near YouDiscover how to properly budget for your new home. Learn about the benefits of working with a realtor and the top websites to find homes for sale.
Buying a home is a difficult process, requiring a great deal of research and saving. Before you even start looking at homes, you must set a budget for yourself and decide what features matter most in a home. This helps simplify the process, since you can automatically exclude homes that do not meet your requirements. If you find all your ideal homes are outside your budget, you must decide whether you want to wait and build up your finances or change your criteria.
Few home buyers are able to afford a house outright. Instead, they rely on housing loans and other discounts. To get the most favorable results from a loan, you need a high credit score. Lower income individuals have additional resources to help reduce housing costs. These are available from either the Federal Housing Administration or HUD. In addition to financial assistance, there are also a number of helpful tools to help you find your dream home.
Before you apply for any loans, find out your credit score. If your credit score is too low, you want to wait before applying for a loan. With most applications, your lender performs a hard credit check. Too many credit checks in a short period of time has a negative impact on your credit score. If your score is too low, you risk making it even lower by applying for loans you are either ineligible for or get poor rates on.
Every year, you are allowed a free credit report from the three major reporting companies. As of writing, this includes Experian, Equifax and TransUnion. There are also third-party services you can use to get a credit score, but you must pay for these services. Not only does checking your credit score give you an idea of what loans are available, but you can check your financial history to make sure the report is accurate. Some common issues to look for are previously closed accounts still reported as opened, paid loans listed as unpaid or credit cards in your name you never opened.
For the best results, you want at least a good credit score, which is anything above 700. However, many housing experts recommend at least 750. Anything above 800 is considered exceptional and provides the best rates on loans. Federal housing grants have less strict requirements, either having no requirements or a minimum score of 580.
Even if you have not looked at homes, you can get a pre-approval letter from your lender. A pre-approval offer shows you are eligible for a loan. This acts as proof you can afford a house when you make an offer. You are not required to commit to using a lender after they provide a pre-approval letter.
When you apply for a pre-approval offer, you must provide information on your finances. The exact requirements may vary based on your lender, but typically you must provide at least two months of pay stubs and tax returns from the previous two years. You must also provide recent bank and investment account statements. Some lenders also require a letter of recommendation from a previous landlord.
Using a Real Estate Agent
Once you have a budget in mind and know what loans are available, the next step is to start looking for houses. One option is to hire a real estate agent. Real estate agents have access to a number of housing resources to help find your dream home. They are also knowledgeable about what affects housing prices and can help with negotiations. Realtors will research both the property and the neighborhood, ensuring there are no hidden issues with your house.
The biggest advantage of hiring a realtor is convenience. Once you tell your realtor what kind of home you want, he or she searches for all applicable properties, narrowing your selections and prioritizing the best homes for you. Realtors only get paid if you purchase a home, so they are motivated to find a house you are happy with. Many banks and lenders recommend realtors they previously worked with. Word of mouth from friends or family members is also a good way to find realtors. You can also search for realtors in your area through the National Association of Realtors (NAR).
In addition to finding real estate agents, NAR also has an online resource, realtor.com, where you can search for homes. The website is an excellent online resource because it is frequently updated and provides greater information about property. One of the most helpful tools is a breakdown of how the house was priced and predictions on whether the price is expected to rise or fall.
Trulia is another website with an expansive home database. Trulia covers not only the home, but also offers details on the neighborhood, including school reviews and crime reports. Local residents are able to comment on the website, giving you additional information on the area. There is also a Trulia app for mobile devices, which makes it easier to search for homes even on the go. Through the Find an Agent feature, you can ask questions in real time to a professional realtor.
Zillow is one of the largest real estate websites. Zillow has two primary uses, listing the current value of prices and listing homes for sales. When you use the website, make sure you are only searching for homes on the market, otherwise, you will be overwhelmed with listings. Zillow is one of the best websites to use if you are searching for a home outside of your state, since it allows you to view the property using detailed images from Google Earth. The website also has an active online community, where you can ask questions and get advice from other community members.
Hiring an Inspector
It may seem like an unnecessary step, but it is worth hiring an inspector before committing to purchasing a home. This is especially important if it seems like the listed price is too good to be true. Home inspectors make sure everything works in the house, inspecting the foundation, electrical and plumbing as well as the general interior and exterior of the home. On average, it costs between $300 to $500, but can save you thousands of dollars in future repairs. If there are issues, you can either negotiate for a lower rate or ask the seller to fix the issues first.