Buying a home is an incredibly exciting experience. There’s an awesome sense of accomplishment coupled with the knowledge that you’ve made one of the biggest decisions of your life. The thing is, not everyone will buy a home. This is just one of those things that some people in their lives while others won’t have this opportunity. Whether this rings true for you or not, you may wonder why. This post will explain 4 reasons to understand the home buying process.
1. As a buyer, you have rights!
When it comes to buying a house, you’re entitled to certain rights such as the right to a mortgage estimate and the right to a clear title. Your mortgage lender is required by law to provide you with a document called the Good Faith Estimate of Settlement Costs within three days of your loan application. This disclosure lists all of the fees you can expect at closing. You also have the right to examine the title on your property to ensure it’s clear of any liens or claims. If any are discovered, it’s up to the seller and not you, the buyer, to resolve them before closing.
2. Understanding the process is crucial to the big picture
Whether you’re a first-time homebuyer or a seasoned pro, the process is the same. It’s easy to get swept up in the excitement of buying your first home, but without an understanding of how the process works, it’s easy to be taken advantage of.
The good news is that there are steps you can take to ensure that you’re educated and prepared for what lies ahead. Here are some suggestions:
Start with your credit score. Your credit score affects everything from your interest rate to your closing costs. The better your credit score, the lower your interest rate will be and the less you’ll pay for mortgage insurance.
Length of employment. Lenders like to see a steady job history when reviewing loan applications. If you’ve bounced around from one job to another, you might have trouble getting approved for a mortgage unless you have substantial savings or a high income.
Down payment funds. The size of your down payment can affect both your interest rate and monthly payments. A larger down payment reduces both costs, but a small one means higher ones — and potentially getting stuck with private mortgage insurance (PMI) if you put down less than 20%.
3. The home buying process varies, so pay attention
Home buying can be exciting, and sometimes frustrating. There are many different steps you must take to make sure you have the best experience possible without it turning into a nightmare. Here are some tips to help you out:
Get your finances in order. It’s better not to even look at houses if you don’t have your finances in order. Make sure to sit down with a mortgage lender and get pre-approved for a loan. This will give you a better idea of what price range you should be shopping in, and will let you know what type of loan may work best for your financial situation. It will also give you an edge when…
