Finding the Perfect Home
Picking the perfect home
Before you look for a home, you should know the type of property you’re after. Is it a condo that meets your needs and preferences? Or is it a single-family home that fits your long-term goals…
To help you decide, consider the following factors:
- How much you can afford
Take into consideration;
- annual income
- monthly expenses
- debt-to-income ratio
all of which will affect the mortgage loan you can afford.
Non-negotiables
List down features that you absolutely need to have in your new home. If you’re moving in with school-age children, you’ll want to find a home near great schools. A good size yard, as well as enough room for the rest of the family could also top your list.
Other considerations are proximity to your work and community services, square footage and number of rooms.
Age of the property
New England’s Seacoast boasts both Historic homes and new construction. A resale property might be the one that you need with a few minor tweaks. But if you’re after a brand-new, move-in property, consider buying new construction.
Types of Mortgages
As a buyer, you’re open to apply for different kinds of mortgages, so long as you meet the requirements. Some of the most common home loans in the market include the following:
- Fixed-rate mortgages – Buyers who prefer stable interest rates often get fixed-rate loans. They are usually paid off in a specific set of time (10 to 30 years) at a specific interest rate.
- Adjustable-rate mortgages – ARMs are attractive as they offer initial lower rates. Unlike fixed-rate mortgages, however, the interest rate is subject to market indicators after the adjustment period. There is no telling whether your interest rate will increase or decrease.
- FHA loans – Backed by the Federal Housing Administration, FHA loans are ideal for first-time home buyers. It’s also a popular choice among those with less-than-stellar credit scores.
- VA loans – VA loans are only offered to veterans, those who are active in the military, and their respective families provided they meet the qualifications.
- Talking to different lenders and examining your options thoroughly will help you find the mortgage plan that fits your financial capability.
Is Mortgage pre-approval Necessary?
Not entirely. Getting pre-approved or pre-qualified for a home loan doesn’t mean you’re guaranteed to get the mortgage you want. These, however, can increase your chances of having your home offer accepted. It all boils down to this: a pre-approval letter sends the right message to home sellers. It says that you are a serious buyer, making home sellers more confident to accept your offer.
Elements of a Great Offer
A great offer has several components, some of which should already be in your arsenal. These include:
- Your pre-approval letter – Express your enthusiasm and seriousness in purchasing the home by adding this to the offer.
- The right price – Depending on the market, your offer can be below or more than the asking price. A comparative market analysis takes a look at similar properties in the area (called “comparables”) that were recently sold. It will help you set a reasonable offer.
- Write an earnest money check – Adding an earnest money deposit strengthens your offer, giving the seller more confidence to accept it. And if that is the case, the money automatically becomes a part of your down payment.
- Include a personal letter – A personal note allows the home seller to get to know the buyer. After all, money might be attractive, but a heartfelt note can seal the deal. Introduce yourself and state your good intentions. It also helps to identify the home features that are important to the seller. Highlight these in your letter by mentioning how it can improve your lifestyle. By doing so, the seller can relate to you.
The Closing Process
Rome wasn’t built in a day … and closing on a house certainly doesn’t happen that quickly either. There are many components which go into the closing process. As the buyer, you have several tasks ahead of you while you’re in escrow:
- Finalize your loan application
- Meet contingencies stated in the sales contract (includes home appraisal and inspection)
- Review your HUD-1 settlement statement
- Start packing up
- Collect all related documents needed for closing day
- Purchase title insurance
Before closing day, perform a final walk-through of the property with the seller and review all paperwork. Signing papers and transfer of title will formally be done on the actual closing day. This guide will help you navigate this final step in the home buying process.
But, wait! What happens if all obligations weren’t fulfilled within the given time period? You and the seller can agree to delay closing day or even cancel the whole transaction. In case of the latter, your down payment will be returned to you.
