Things To Know About Buying A House

Things To Know About Buying A House – Want to buy a home but don’t know where to start? This article will give you an overview of the 5 things you will need up front to complete your home purchase!

1: Pre-approval of a mortgage loan The first step in the process of buying a house is to collect funds for the purchase of the house. For most, that means qualifying for a mortgage loan and getting one. A mortgage is a loan that is specifically used to buy a house.

Things To Know About Buying A House

How do you get pre-approved? You can search for lenders online or call us and we will be happy to give you a personal recommendation. The key is to find a mortgage lender who is there to help make the process as easy as possible. Once you’ve found a lender that’s right for you, they’ll help you determine how much money you can borrow and will continue to help you throughout the buying process. Once you’re approved and before you start looking for properties, your lender will issue a pre-approval letter to share with real estate agents, sellers, and home builders. This letter lets everyone know that you have already gone through the mortgage loan approval process and what your loan limits are.

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2: Earned Money Now that you are pre-approved for a mortgage loan, you will need to secure funds for your earned money. Earned money is what you put up front when you buy a home. He says, “I honestly want to buy your home, so I’m putting this money in with my offer.”

The money earned varies depending on the total purchase price. $1000-$1500 is recommended for a home of $500,000 or less. For homes of $500,000 and up, the cash back amount earned can range from 1% – 5%. Earnings vary, so it’s important to check this amount with your real estate agent.

If the sale goes as planned, your lien will be credited to you at closing. If you cancel the purchase agreement within the credit objection and review period, you will usually get your money back. If you’ve missed those deadlines, it’s much harder to get those funds back, if at all. Once the deposit is collected, it is usually held by the Title Company or listing agents office.

3: Money for your down payment The third step in the home buying process is getting the money for your down payment. When you initially get pre-approved from a lender, they will tell you the estimated amount you need as a down payment. Some mortgage loans like VA loans or USDA loans do not require a down payment, so it is important to review your down payment with your lender. If you are buying OUTSIDE the Bozeman city limits, you could potentially qualify for a USDA Rural Development mortgage loan that has a 0% down payment!

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The usual down payments are on average between 3% and 5% of the total purchase price. However, some lenders require up to approximately 20% down payment if you already own a home and want to purchase a secondary residence (25+% down payment). There are many options available and your lender will help you determine which loan is best for you.

4: Money for closing costs Now that you’re pre-approved, after you’ve established your bond and down payment, you need to set aside additional funds for closing costs. When you take out a mortgage loan, the mortgage company has associated fees that they charge for generating your loan. These fees are usually between 1% and 4%+ of the loan, depending on the type of loan you have. This is another topic area that you will want to thoroughly review directly with your lender.

There are times when you, the buyer, can ask the seller to contribute to your closing costs when you first write the sales contract. This option will depend on the local real estate market, the competitiveness of other offers and the Seller.

5: Money for a Home Inspection After you have completed steps 1 – 4, you will need to have the funds for a home inspection. Once you’ve found your dream home and have a signed contract between you and the seller, you’ll need to hire a home inspector.

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The average cost of a home inspection in Bozeman is $500 – $700 and up, depending on the size of the home and the amount of work required for the inspection. We typically schedule an inspection period of 10-15 days which gives you as the buyer time to hire a home inspector and plenty of time to ensure there are no major issues.

Depending on the home, you may also want to hire a separate vendor to inspect the well, septic system, structural aspects, mold and pest inspection. Discuss these additional inspections with your real estate agent and they will help guide you through these options. Be sure if you opt for additional inspections that your agent writes enough time into your inspection schedule to complete them all.

Conclusion Buying a home is a big step and we want to make sure everything is crystal clear in your expectations. This should be an exciting time for all parties involved, not a stressful one. Call us to start finding your dream home! Throughout this process, your real estate agent and your lender will be your two main go-to people in this process.

If you’re feeling overwhelmed and intimidated by the process, take a deep breath and call Tamara Williams at (406) 223-6823. We will help you reduce the stress and anxiety you feel. This should really be a fun and exciting time for you, and having a Realtor in your corner who advocates for what you want and keeps you informed at the same time is what you really need.

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Facebook Share this post on Facebook Twitter Tweet this post on Twitter Email Email this post link In your 20s, buying a home can seem like a pipe dream. Maybe you just graduated, you’re dealing with student loan debt, and you’re doing it all on a starting salary with no raise in sight.

While buying a home can seem daunting, millions of millennials have done it. Millennials are now the largest single group of homebuyers in our country — and many are buying homes on their own, long before marriage or children are even on their radar.

But is this move right for you? More importantly, can you afford it? Let’s break it down.

The benefits of home ownership are huge – especially when you’re younger. A home is a long-term investment, and when you are younger, you have more time to grow that investment.

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You can also save on monthly housing costs. Rents have skyrocketed in recent years in most major cities, while average mortgage payments are often comparable to or lower than rents in many regions.

Finally, you have the option of renting out your property on Airbnb or other similar sites to earn extra cash as needed.

There is no right or wrong time to buy a home. Legally, you can buy and own property at 18, but that doesn’t necessarily mean it’s the right move for every 18-year-old.

A home is a huge and expensive purchase, and you will have to live with it for years or even decades of your life.

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At the very least, you’ll have to wait until you have a steady income, a stable job, and a decent credit score. This will allow you to get an affordable mortgage loan and cover that mortgage payment month after month while you are in the home.

Buying a home isn’t as difficult as many first-time buyers think, especially when you meet the minimum home loan requirements.

Keep in mind that the guidelines for buying a home are the same regardless of age. Whether you’re 18, 25 or 55, mortgage lenders will require you to meet the same standards for income, savings and credit.

However, these requirements vary by loan program and lender. So when you’re applying for a home loan, it’s often worth checking with multiple companies to see if you qualify.

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If you have enough cash to exceed the minimum down payment requirement for your loan, you’re more likely to qualify for a lower-rate mortgage that saves on long-term interest.

Your credit score tells lenders a lot about your personal finances. But you won’t need pristine credit to qualify for a mortgage.

Exceeding your loan program’s minimum credit score – especially with a conventional loan – can help you lock in a lower interest rate, saving you significantly on your borrowing costs.

When checking your own credit, keep in mind that the scores you see on free credit monitoring apps are usually higher than the FICO scores lenders will see.

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Your existing debt affects your eligibility for a mortgage. That’s why lenders measure your debt-to-income ratio. This ratio compares your monthly debt payments to your gross monthly income.

Want to measure your DTI? Just add up your loan payments (auto loans, student loans, personal loans) along with your minimum credit card payments. Then divide that number by your gross monthly income. Multiply the answer by 100 to see yours

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