How to Buy a Home

So you’ve decided to buy a home. No matter what the economy is like, real estate remains one of the most stable, profitable long term investments available, so purchasing a home remains an excellent financial choice. But what should you do when you are preparing to buy a home?

Before you ever contact a real estate agent or begin looking at homes, you should take a critical look at your financial situation. Check your credit score with all three major credit reporting bureaus – Equifax, Experian, and TransUnion. Your credit score will affect your ability to purchase a home, and will determine the interest rate that you can obtain. A good credit score can shave one or more points off your interest rate, saving you thousands of dollars over the life of your loan.

Also, determine how much cash you have available for your down payment, moving costs, home inspection, realtor’s fees, and other costs associated with buying a home. A home purchase is often a stressful event, and you don’t want to make matters worse by going into the process without enough funds in the bank.

Once that you have established that you are financially ready to buy a home, contact a real estate agent who knows the neighborhoods you are considering. Your real estate agent will sit down with you to discuss your wants and needs, and will locate homes that may be a good fit for you. He or she will also be able to help you with many of the tasks involved with buying a home, such as scheduling a home inspection, negotiating with sellers, and setting up the closing meeting.

You should also work with a bank or other lender to obtain a prequalification letter, which tells potential sellers that you have the means to purchase the home. If you are not familiar with available lenders, your real estate agent can help you obtain a prequalification letter from a lender that will meet your financial needs.

Now that you have selected a real estate agent and obtained a prequalification letter, you can begin touring homes. Your real estate agent will likely show you numerous properties, and will look to you for comments along the way, so he or she can choose homes that fit your vision.

Once you have selected a home, you will work with your lender to obtain financing approval. Be prepared to supply documents such as income statements, three years of W2s or other tax statements, verification of employment, and bank statements. If you are a first time home buyer, your lender may also want to see one year’s worth of cancelled rent checks.

While you are working through the loan approval process, work with your real estate agent to schedule a home inspection. This will help you make sure that the home is in good condition, and allow you to estimate your repair costs after moving into the home. If there are items in need of significant repair, you can ask the seller to complete these repairs.

Finally, you will attend the closing. This meeting will be attended by you, your real estate agent, the seller and his or her agent, the loan officer, and the title officer. Here, you will complete your loan and title documents, and take official possession of the home.

Author : Mark S. Lackey

http://www.isnare.com/?aid=347696&ca=Real+Estate