Wonder where to start when thinking about house hunting? A variety of factors go into making a focused checklist as you prepare to buy.
Down Payment
Saving for your down payment should be your top priority. Depending on the type of loan you acquire, you’ll receive a few different down payment percentage options. A Mortgage Reports article states that some lenders require as little as 3.5% of the home’s value, or less, as a down payment to get your loan approved. Meet with a loan officer to establish some numbers so you know how much down payment you’ll need to get the most favorable loan terms.
Know What You Want
Take time to establish key features you prefer in a home. Do you prefer a ranch? What about a two-car garage? How important are green features, both inside and out? Creating a list of must-have items will allow you to target homes you’ll want to visit and spend less time visiting homes that may not make you happy in the long run.
Get Pre-Approved
Sellers often choose buyers with a bank pre-approval over those without one. This gives you an advantage over other prospects and shows the seller that you are a solid buyer. This pre-approval also helps you narrow your search to your budget, so you don’t get too distracted with a house that you won’t be able to afford. This step will really help you save time in the long run.
Earnest Money
Did you know that earnest money is not the same as the down payment? Earnest money is a fee usually between 1-2% of the total home price and is used to show good faith during the home offer process. Buyers treat it like a small credit which eventually comes back to you as the house sale ultimately closes.
Closing Costs
Alas, final fees can add up at the end of your home-hunting journey as you approach closing. These payments are made to the various parties like attorneys and real estate agents and range from 2-5% of the loan amount and include fees for appraisals and title insurance.
Get connected with your Mel Foster Co. agent today to begin your search. There is less competition in the winter months, making now a good time to start your search.
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