5 Things to Know When Buying a House
Buying a house is both exciting and intimidating. A lot of people want to know where to get started and what to expect. Below is a list of 5 things you can expect.
1) What Comes First the Chicken or the Egg?
Are you supposed to get a prequalification letter before finding that dream house? The short answer is yes. Ideally, the first call in the process should go to a mortgage company. However, if you happen to drive past your dream home, find a real estate agent, and then a mortgage company; you will be fine. If you are just getting started, then be sure to get a prequalification letter first. This will help your real estate agent know you are serious and prove to sellers you are as well. It will also give you peace of mind and help you search within your means.
2) No Doesn’t Mean No
Just because one mortgage lender says no does not mean they speak for the entire industry. Every mortgage lender follows the same standards set forth by the government, but mortgage lenders add their own risk tolerance beyond that. If you are running into a wall with one lender, shoot for a second opinion; especially if it’s due to income or a risk-assessment on the house. This is one of the ways working with an experienced mortgage advisor will benefit you.
3) Customer Service is Number One
The only thing more frustrating than bad service at a restaurant is bad service from a mortgage lender. When you are making the largest purchase of your life, you deserve to be working with someone who understands and respects that decision. Working with a company that has competitive pricing is good, but working with a team that puts your needs above everything else is priceless.
4) What Will the Purchase Cost
Your costs can be broken down into 3 categories: Down Payment, Settlement Services, and Repairs.
The down payment can range anywhere from 0% – 99% depending on loan programs. What you are trying to accomplish will determine how much cash you should put down. There are different types of loans for those trying to lower their overall monthly payment and those trying to spend as little as possible up front. Settlement Services and repairs vary from lender to lender and home to home. In most situations, these numbers are negotiated between seller and buyer. Repairs may not be necessary at all and can also be built into a purchase agreement. It is important to find a lender who will cover all of these components in depth with you upfront.
If these costs seem overwhelming or out of your budget, contact a mortgage lender. They will be able to look at your individual circumstance and give you tips to prepare accordingly.
5) Communication Is King
There should be nothing mysterious about the process of purchasing a home. A worthy mortgage loan advisor will stay in constant communication and keep you well informed. From my own personal experience, prior to being with Royal United Mortgage, I bought my first home through a different company and the whole situation was extremely stressful. I remember not knowing what to do next or where I was at in the process. At one point, we had rented (and filled!) a U-Haul for over a week because closing dates kept getting pushed back at the last minute. My questions were not getting answered and I was certainly not happy with the overall process. This should have been an exciting time for me and my wife, but instead, we were left feeling unsure and frustrated. I can’t speak to every mortgage company out there, but at Royal United Mortgage, that experience won’t happen to you. We have best practices in place where the borrower will be well informed and communicated with every step of the way. Asking questions is free and encouraged.
We would love to help you figure out exactly what you qualify for, what monthly payments will look like, and educate you on the process.