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The Pre-Purchase Guide

April 03, 2008  |  Difficulty: Easy

Path to mortage
The first step on the pre-purchase guide is to visit a reputable lender –either neighborhood bank or credit union- and go through the pre-approval process for a home mortgage. Let’s list the benefits of doing this:

  • You will have a good idea of your spending limit. Knowing what you can afford will help you narrow down your home search.
  • You will be able to see your credit rating. Before the lender can pre-approve you, he or she must check your credit score. Ask for your credit score, so you know before going to look at what other lenders have to offer. You don’t have to seek out quotes from different lenders, but knowing your credit score will give you a good idea of how much money you will be approved for. This way you can still search for houses and check out who will give you the most of your mortgage loan.
  • After getting the pre-approval information, you can then calculate how much you will have to spend monthly in order to stay on a steady payment schedule. This information is important, it let’s you know if you will be able to pay back the mortgage without sacrificing most of your monthly income.
  • Your pre-approval may come with a “locked” interest rate. This means that when interest rates go up, your rate will stay the same. This can save you thousands of dollars over the course of your home mortgage loan.

If you are still iffy on this subject, why not take a home buying class. Most states offer free classes for first time homeowners. Once you have considered these things, it is time to start looking for that perfect home! Many people seek out the help of a real estate agent. You are in charge so you can work with more than one real estate agent during the initial stage of home shopping. The real estate agent costs nothing to you because the seller of the home pays for the real estate agent’s fees. However, different states have different regulations; make sure this is the case where you live.

A good resource to turn to while home shopping is the weekend newspaper. There is usually a listing of “open houses”. This will allow you to visit the property. Make the time to visit a few open houses to see how much house and space you get for your price range. You can also visit new housing developments to see what a builder is willing to give to you for around the same price.

Knowing as much as you can about the housing market, the prices of homes and what you are in control of as the buyer will help you to keep a clear mind while you are searching for your home!

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