If your Credit Scores are good; get um better!
The higher your Credit Scores, the lower will be your Interest Rate.
Don't worry about the Lender right now; an application only lasts about 90 days.
Don't worry about houses; what is available now, won't be there in 6 months.
Don't worry about the MARKET; it will be very different in 6-12 months.
Don't worry about Interest Rates; they will be higher. (Okay, you can worry about this!)
What can a chat with a lender do you for you? One is to discover and correct credit problems that might affect your rate and ability to borrow. In addition there are a number of mortgage programs lender can tap into and you will have to decide what will be best way to proceed. He/She will answer your question about amount of downpayment, gift letters, length of loan, types of loans, grant programs, etc. Plan on this discussion being somewhat lengthy and be aware you will be asked for paperwork as it is through documents the lender will be telling your story to those with the money. By all means speak with several lenders if for no other reason than to confirm you are getting good information. Things change very swiftly in real estate so creating relationships now with Realtor and lender will have you poised for action when you are ready. Please call me, 703-593-0450, I can explain further.
I had this written down for another customer, so I'll give you my first step and those after as well.
1 - My first tip is, if you have not already spoken to a lender, pick your real estate agent first. This is the person you will be working closest with throughout the whole process, spending a lot of time in a car with them, and will, most likely, have a personal relationship with. Also, the amount of volume an agent does can translate into less personal service, so ask about that in an interview. A good agent will have a list of qualified lenders they work with on a regular basis. My lenders also keep me aware of loan packages they have available for clients that have certain qualifications that a buyer may not even think to ask a lender about. For example: There are still 100% mortgages available. The VA offers a 100%, and sometimes higher, mortgage to military veterans and their families. Also, in rural areas (population of 10,000 or less - which most of Loudoun County, Virginia qualifies for!) the USDA offers a 100-110% mortgage to those who qualify at or below the median salary range for that specific area. Non of the larger banks I know will even offer this loan because it involves a lot of paperwork, but smaller local banks are happy to offer this program.
2 - To help yourself, and your RealtorÂ®, make a top 10 list of what is important to you in a home. These are in no particular order, but will give you an idea of what to put on your list and I'm sure you can think of others, but this is a basic list.
4:Size-BR, BA, Sq. Ft., yard, garage, etc
5:Age of home and style: new build, older home, victorian, rancher, traditional, contemporary, etc - or if you are interested in a condo and what style of building
7:Timeline for purchase
8:Any special needs - ex: handicapped accessibility
10: Ideal Master bedroom
3 - When you have selected a lender, make sure you have your pre-approval from your lender ready to go with your RealtorÂ®, because when you find your ideal home, most likely it will also be someone else's ideal home too, and you don't want to lose it because of a paperwork delay.
4- When you find a neighborhood you like, visit it at night, as well as the daytime. This will tell you a lot about your the neighborhood that you will never see in the light of day. And, you can introduce yourselves to neighbors who are now home from work and ask them questions about how they like living there, or what they don't like. I had one client considering buying a house, until we spoke to a neighbor unloading groceries next door. She basically said, run...run as fast as you can away from this neighborhood! I'm trying to myself!
5 - You may not need as much money as you thought for a down payment. FHA loans, which make up a majority of mortgages, only require 3.5% for a down payment. Also, if cash-on-hand is an issue, have your agent request closing cost help in the contract. Most sellers will agree to this, depending on the price point. Your agent will check with your lender on exactly how much your loan will allow you to receive in concessions.
6 - Out-of-pocket expenses to expect before actually buying a house: a) home inspection will run around $300-$500 depending on the size and age of the home. It may be a little more or less expensive, depending on the area of the country. HAVE a home inspection done, even on an as-is property. It will reveal a lot. b) appraisal costs - if you get to closing this will become part of the closing costs. If you decide to back out of the contract after the appraisal, you will receive a bill for this cost. This will run upwards of $500. c) termite inspection, if required to be paid for by the buyer, will run anywhere from $35-$100 depending on the company, the size of the house and the thoroughness of the inspection d) radon inspection, if you choose to do one, will run $50-$150, depending on the size of the house, throroughness of the inspection and the company used. e) well and septic inspections will vary greatly depending on the house location and how thorough an inspection you order. I can't even give you a range, because of the large differences across the country.
7 - Finally, do a lot of research on your own. Your RealtorÂ® is only allowed to legally give you certain information. We cannot tell you anything about the neighborhoods, beyond amenites, comparables, etc. We cannot tell you anything about schools. We cannot answer anything about crime. To answer any of these questions would put our license in jeopardy as it could be considered "steering".
I hope this helps!
RealtorÂ® in DC, Maryland and Virginia
Keller Williams McLean-Great Falls
I do first time homebuying seminars usually once a year. I've helped 1st timers for 23 years, and many have turned into 2nd, 3rd timers! If you want, give me a quick call so I can get a better feel for what you are doing (believe it or not, things vary from person to person) and give you advise. It will take about 5 minutes if that long! 202.262.7062...I am licensed in MD, VA and DC, if that helps.
That is a good question and an important one. You should check on your credit scores to make sure there is nothing on either of your records that would pull down your scores. If there is try to get it resolved. The higher your credit score the lower the interest rate you can qualify for.
I would then recommend talking with a lender who can give you an idea of how much you can afford to pay and give you a price range that works for your budget. There is nothing worse than seeing the home of your dreams and not being able to afford it, it makes looking at home after it harder since you are comparing every home to that one. You should work on a list of things that are must have's in your new home, a 2nd list of items you would like to have but are not deal breakers. I would then find a Realtor to work with, make sure the Realtor you work with knows how to work with buyers, like someone who has the ABR designation and knows the neighborhoods you are looking to purchase in.
It's great you are considering a home purchase. I believe that a home purchase, done correctly is the single greatest wealth building factor a person can do in their life. Short of hitting the lottery that is. :)
I believe the first step is to discuss your goals with a local mortgage lender. The first question I ask prospective borrowers is "where do you need to be for a monthly mortgage payment?" Then we break it down and explain the process. We pull credit as soon as possible so if there are problems we have time to fix them. Once the loan process is explained and we have reviewed the various processes to qualify for a loan then it's time to go out and get a Realtor. I have an excellent team of Realtors that know DC and the suburbs very well and would be happy to introduce you to them when you like. For what it's worth I think you should talk to a few lenders and a few Realtors to get a feel for what they can offer and how the relationship develops over time. I hope this was helpful and please let me know any questions.
1st Mariner Bank
I would welcome the opportunity to meet with you and your fiance to go over the home buying process with, provide you with a Buyer's Guide and hear, what you are looking for in a first home. I work with many first-time home buyers and understand it is a big step to take. I also have a list of lenders I can give you so you can get pre-approved which is really one of the first steps to take. If you are interested, please contact me at 202-499-7047 or email me at email@example.com. I look forward to hearing from you.
Keller Williams Capital Properties
I am happy to meet with you and your fiance to discuss the process of purchasing a home. I can provide you with references to additional professionals who will be important to you in the process as well.
DC Living Real Estate, LLC
Thank you for asking the question as it is imperative to know the proper steps. The very first is to connect with a lender.
If you'd send me an email where I can forward you the booklet, it will be beneficial for you no matter whom you hire to work with you.
BORIS MIRIC - Realtor Serving DCâ€“VAâ€“MD
Certified Investor Agent Specialist (CIAS)
Certified Distressed Properties Expert (CDPE)
Office: (202) 459-4700 | Fax: (202) 318-6520