Guest Blog Post by:
Mary Neubauer, Realtor® Weichert Realtors New Colony www.maryneubauer.com
After the housing crisis in 2008 and the recovery of the economy, many still believe that obtaining home ownership is out of their reach. According to the Joint Center for Housing Studies of Harvard Ownership, “Reversing the long uptrend in homeownership, American households have increasingly turned to the rental market for their housing. From 31 percent in 2004, the renter share of all US households climbed to 35 percent in 2012, bringing the total number to 43 million by early 2013.” Compiling student loan debt, along with a fiery political election and uncertainty for the economy’s future, many who want to own are holding off.
The home buying process can be a life altering event. It’s comes with high emotions and stress. With many moving parts, it can leave consumers feeling overwhelmed and uncertain about what to do. However, there are steps you can take before hiring an agent to guide you, to prepare yourself for the home buying journey.
Get your head out of the sand.
If you’re anything like me, you hate checking your credit. If you have debt, maybe a late payment here or there, or no credit at all, it can seem daunting trying to figure out where to start. If you can’t afford a financial advisor, sit down and make yourself a budget, better yet hire The Wisest Penny for a financial checkup. Sorting out your finances is a critical often overlooked step before starting the home search. Getting a grasp on your monthly financial flow, along with knowing your credit score and what is on it, is important.
Many people think they can’t purchase a home because they don’t have a down payment saved, or they don’t want someone looking over their finances. They don’t want to make a commitment to a mortgage or they aren’t sure what the future will hold for them. But rent is only increasing, as taxes, HOA fees, and the housing shortage rises. Addressing these concerns with trusted local professionals (a Realtor® and a loan officer) and learning about your market trends from them, is very important in making the decision to purchase. Both are held to a high code of ethics, and should have your best interest at heart, working as your protector in this process.
Consult with a local trusted loan originator.
Also called loan officers, speaking with a local trusted originator is the first step in the process. It’s typical to contact an agent first, find a home then try to obtain a pre-approval. Consulting with a local lender first is key for two reasons. One, you know how much you can afford before you start looking. Yes, you can have an idea, but you may be missing out on your dream home if you think you can only afford so much, and can actually afford more. Or, you may be looking at homes out of your reach, and get devastated when you find out it won’t work for you. The second reason, is they can help you foresee any problems before you offer. If you find a lender who does the underwriting before you find a property, that is ideal. A number of things can pop up while trying to obtain financing, so if you are able to get those things out of the way first, then you have a better chance of getting your home.
It is possible to buy without established credit. It’s also possible to purchase with lots of debt. When you start the home buying process, many will have advice and stories for you. But, each person’s experiences and finances are different. There are many factors that apply when purchasing a home. Finding out exactly where you stand financially, what loan is right for you (did you know there are more than 2 types of loans?), and where you feel comfortable in purchasing is crucial to having a successful and seamless home buying experience.
Decide what is important.
Make a list of what is important to you in a home. Do you have to have a garage? So many bedrooms? Be in a certain school district? Having a list of needs will help your agent find you the home that best suits your needs and established budget.
Hire and LISTEN to your trusted Realtor®.
Once you have your pre-approval and have hired a Realtor®, you’re ready to move on to your purchase. Your Realtor® will guide you and offer advice through the process. They will and should work closely with your loan officer to help you complete your purchase. Keep in mind, there are certain expenses that come with buying a home. They include but are not limited to, paying for the home inspection and appraisal, closing costs, and home repairs.
As I mentioned before, your Realtor® should be your protector when buying or selling property. They hold your interests in the upmost regard and ensure you understand what you are signing and guide you through the process. Having a team of professionals, who are present, knowledgeable, and understanding will benefit you in this journey.
Don't be afraid to move forward, get the process started by joining The Wisest Penny A.K.A Rita and I for a FREE workshop on First Time Homebuying on September 24th from 10am - Noon, at the Urbana Regional Library in the Small Conference Room. The workshop will have a max. of 25 participants.
Please fill out the form below to register. We will also have a gift card drawing, one lucky participant will receive a $25 gift card to Crate and Barrel!