Buying a house can be confusing and overwhelming, but being freed from a landlord and no longer throwing away rent payments can also be liberating. Whether you are a first-time homebuyer or an experienced owner, there are steps to consider when buying a house. Buying a house requires a lot of time and effort, but these 10 tips can help make the home buying process manageable and help you make the best decisions possible.
- Start your research early. Check websites, newspapers and magazines for local properties on the market. Watch to see how long they stay listed and note any price changes. This will give you an idea of the housing trends in the area.
- Check your credit. Everyone is allowed one free credit report each year. You can go to: www.annualcreditreport.com. Check your credit and see if there is anything that you can do to help clean up or increase your credit score. Take a printout of your credit report to a HealthNet Federal Credit Union location and ask one of our loan officers how you can improve your credit.
- Determine how much house you can afford. The general rule of thumb is that you can buy housing that runs 2.5 times your annual salary. See what works best for you and your financial situation. HealthNet offers online calculators that will help you discover what you can really afford. You can find these calculators at: http://www.healthnetfcu.org/calculators.htm.
- Get Prequalified and Preapproved for your Mortgage. Before you start looking for a house, you will need to know how much you can actually spend. The best way to do that is to get prequalified. This will tell you the price range of the homes to look for when you begin your search. Once you have narrowed down your search and are closer to making an offer, make sure you get preapproved. To get prequalified or preapproved, print and complete our Residential Loan Quick Worksheet and fax to 901-226-1122.
- Find a Real Estate Agent. Real estate agents are an important part of buying a home. They can provide you with helpful information on homes and neighborhoods that is not easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable.
- Choose carefully between points and rate. When picking a mortgage, you usually have the option of paying additional points – a portion of the interest that you pay at closing – in exchange for a lower interest rate. To see if paying the points will serve you better, use this HealthNet calculator. Also, check with your tax advisor.
- Start shopping. Start touring homes in your price range. Take a camera and a checklist with you. The more houses you look at, the more the details will start to run together. Use our Home Shopping Checklist to help you keep the details straight once you begin looking. Check the little things like plumbing, electrical switches, and windows/doors to see if they work properly. Take as much time as you need to find the right home.
- Get a home inspection. A home inspection of the property is used to check for structural damage or things that may need fixing. Once you receive a copy of the inspection you can then decide if you want to ask the seller to fix anything on the property. Before the sale closes, you will have an opportunity to do a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.
- Your mortgage lender will have the home appraised. Appraisals are an important part of your home buying transaction. A real estate appraisal helps to establish a property’s market value; the likely sales price it would bring if offered in an open and competitive market.
- Close the sale. At closing, you will sign all of the required paperwork to complete the purchase, including your loan documents. Once the check is delivered to the seller, you are ready to move into your new home!
At HealthNet Federal Credit Union, we care about our members and want to help you make the best, most informed decisions. For more educational articles, check out our newsletter, NetEffect. To become a member, or for additional information on buying a new home, call 901-226-1111 and speak to a Member Services Representative, or visit one of our four convenient locations.
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