Joanna Schlansky's Blog
The homebuying journey is exciting, particularly for an individual who is pursuing a residence for the first time. Ultimately, there are many questions that a buyer should consider before he or she searches for a house for the first time, and these include:
1. What is my "dream" home?
Perhaps the most enjoyable part of the homebuying journey involves defining your dream residence. Because once you define your dream residence, you'll be able to narrow your house search and move closer to purchasing your first home.
Think about what you absolutely require in a new home. For example, if you want to own a house in a region where the weather is hot and humid year-round, you may require a central air conditioning system. Or, if you want to enjoy a fast, easy commute to work, you may want to pursue residences close to your office.
2. How much can I afford to spend on a house?
Getting pre-approved for a mortgage is essential. Because if you have a mortgage in hand when you begin your house search, you may be able to gain a competitive advantage over rival homebuyers.
To obtain a mortgage, you should meet with a variety of banks and credit unions. These financial institutions can teach you everything you need to know about fixed- and adjustable-rate mortgages.
In addition, don't hesitate to get expert insights into assorted mortgage options. The longer you wait to get pre-approved for a mortgage, the longer you may need to wait to kick off your home search. Thus, you risk missing out on a potential dream house if you fail to get your home financing in order.
3. Do I need to hire a real estate agent?
Hiring a real estate agent is a must, especially if you plan to embark on the homebuying journey for the first time. In fact, a real estate agent can help you quickly and effortlessly navigate the housing market and discover your ideal residence in no time at all.
Typically, a real estate agent will offer comprehensive assistance at each stage of the homebuying journey. He or she first will meet with you, learn about your homebuying goals and help you craft a homebuying strategy. A real estate agent then will keep you up to date about houses that match your criteria and set up home showings. And when you find a home that you want to buy, a real estate agent will help you submit a competitive offer and negotiate with a seller's agent on your behalf.
Let's not forget about the advice that a real estate agent will provide, either. A real estate agent is unafraid to be honest with you and will provide feedback throughout the homebuying journey. Also, if you ever have homebuying concerns or questions, a real estate agent is ready to respond to them.
Take the guesswork out of finding and acquiring your first house – employ a real estate agent, and you can receive plenty of support as you move along the homebuying journey.
Buying a home is one of those things in life that requires you to take a certain order of steps to complete the process. First, you’ll need to save up some money for a down payment and all of the other costs that go along with buying a home. Next, you’ll take a look at what you can afford and perhaps get pre-qualified. Then, you’ll hire a realtor and begin searching for properties. Finally, you’ll make an offer, sign for the mortgage and close on the home. After that, you’ll probably buy some furniture and paint the walls to make yourself feel at home.
Would you ever dream of making that big home purchase without actually seeing the property first? One of the most time-consuming parts of the home buying process is that of viewing homes and visiting property after property.
There are actually many reasons that a buyer might buy a property without seeing it first. With the Internet, it’s fairly easy to get an idea of what a house might be like. Too, if you’re an investor, it’s sometimes worth the gamble to scoop up a property at the right price in order to score a great deal.
It’s also usually not detrimental to buyers who are trying to get a home in a high competition market to go after places they really love immediately. The early bird does get the worm, right?
Properties in distress may be in poor condition, but for the right buyer can be a great deal. Banks want to get rid of these places as soon as possible due to the expenses incurred by keeping them.
Not all properties that are bought sight unseen are fixer uppers. Some properties can be bought in the pre-construction phase. These homes haven’t been built but are already on the market available for purchase. Many times, buying properties this way can be cheaper than buying the new construction home after it’s built.
There are obviously many risks to buying a home sight unseen. First, pictures can be deceiving. You never really know what you’re walking into until you see it. Photographs can easily hide major damage. Until a home is physically inspected, you may not know what the costs will be to repair it.
The same risks apply to new construction homes. The layout of the home may not be what you’re looking for, or the home may not include the features that you want.
When you do decide to buy a home sight unseen you need to weigh the risk versus the reward in the transaction. It can be a valuable decision, in the long run, to take a chance on buying a home that you haven’t been able to physically inspect.
Applying for a mortgage may seem like a long, stressful process at first. Fortunately, we're here to help you take the guesswork out of submitting a mortgage application.
Now, let's take a look at three tips to help you streamline the mortgage application process.
1. Ask Questions
A bank or credit union likely will ask you to provide a wide range of information as part of the mortgage application cycle. And as you complete a mortgage application, you may have questions along the way too.
Remember, a lender is happy to help you in any way possible. If you ever have concerns or questions as you complete a mortgage application, you should reach out to a lender for expert support. That way, you can reduce the risk of potential problems down the line that otherwise could slow down the mortgage application process.
Even a single mistake on a mortgage application may prevent you from getting a mortgage. Perhaps even worse, a delayed mortgage application may force you to miss out on an opportunity to acquire your dream house. But if you reach out to a lender as you complete your mortgage application, you can gain the insights you need to quickly and effortlessly finalize the necessary documentation to obtain a mortgage.
2. Be Thorough
A mortgage application may require you to look back at your financial and employment histories and provide information that a lender will use to determine whether to approve or deny your submission. Meanwhile, you should be ready to provide a lender with any requested information to ensure a seamless application process.
As a homebuyer, it is your responsibility to include accurate information on your mortgage application. In fact, failure to do so may cause a lender to reject your mortgage application. If you allocate the necessary time and resources to dot every I and cross every T on your mortgage application, you can boost the likelihood of a fast approval.
3. Shop Around
For homebuyers, it is crucial to check out all of the mortgage options that are available. If you meet with a variety of banks and credit unions, you can review myriad mortgage options and select a mortgage that complements your finances.
Banks and credit unions generally provide a broad array of fixed- and adjustable-rate mortgages. If you learn about all of the mortgage options at your disposal, you can find one that enables you to purchase your dream house without breaking your budget.
Of course, once you are approved for a mortgage and are ready to launch your house search, you may want to hire a real estate agent as well. A real estate agent will offer plenty of guidance at each stage of the homebuying journey. In addition, a real estate agent can make it easy for you to find a top-notch residence at a budget-friendly price in any housing market, at any time.
Start the mortgage application process today, and you can move one step closer to acquiring your dream residence.
Buying your first home is a big endeavor, both financially and personally. Homeownership means taking on new responsibilities and bills, but it also means true financial independence.
If you’re hoping to buy a home in the near future, you might be wondering what you should be doing now to put yourself in the best position when it comes time to buy a home. Well, you’re in luck. Today’s post is a simplified list of all of the things you can be doing today to start making your way toward your ultimate goal of homeownership.
1. Pay off small debts
The first thing you’ll want to do to start saving for a down payment is to make sure you’re not pouring money down the drain to credit card companies for interest rates. If you owe small amounts of money (or less than $1,000), now is the time to aggressively pay down those debts.
The goal here is to get your credit cards to a place where you pay off your balance in full each month, avoiding interest while still earning rewards and building credit.
2. Speaking of credit…
One of the most important aspects of buying a home is your credit score. Take the time to learn about the 5 main things that contribute to your credit score and then work on ways to improve your score in those areas.
3. Don’t open any new accounts if you can help it
Once you start getting closer to applying for a mortgage, you won’t want any new inquiries on your account that are temporarily lowering your score. If you need to open a new account to lift your score, then do so well in advance of applying for a mortgage.
4. Get serious about saving for a down payment
There are a few ways to proactively save for your down payment; none of them include setting money aside when you feel like it. Start by opening a dedicated account and direct-depositing a portion of your pay into that account each week.
If you have an emergency fund in place, you might be in a position to use a CD or certificate of deposit. These give the highest earnings from interest out of any form of savings. The catch? You can’t withdraw from the account until you reach your savings goal without a penalty. If you know you won’t need to dip into these funds before they’ve matured, a CD is an excellent way to save.
5. Find out how much house you can afford
Homes are expensive. but, if it’s your first home, you might need to borrow the maximum amount form the bank to find a house that you’ll love. To find out what is a reasonable amount to spend on a home, you’ll need to consider your monthly mortgage, bills, taxes, insurance, and any other expenses. Leave yourself room for savings, emergencies, and to live a little. You won’t be able to enjoy your home much if you have to spend your days struggling to afford it.
6. Career planning is vital
A good career is a balance between stability and upward mobility. Don’t be afraid to be on the lookout for new positions with higher pay and better opportunities, even if you’re happy with your current job.
If you’ve been in your position for a while, consider asking for a raise. Research salaries for other people in your position and go to your boss equipped with data to show that show you deserve a raise.
Going through the process of applying for a mortgage only for your application to get denied can be a frustrating and confusing time. If you’re hoping to buy your own home in the near future, it’s vital to secure financing or you risk missing out on a home that you may have been depending on getting.
In today’s post, we’re going to talk about what happens when your mortgage application is denied and what you can do to fix the problem as quickly as possible.
Determine the Cause of Denial
If your application is denied, priority number one needs to be to understand what happened. Since lenders are required to provide denied applicants with a letter explaining why they were denied, this just means reading the letter and making sure you understand all of the reasons listed.
There are a few common reasons that an application may be denied. Some of them are simple fixes, while others might require time and effort on your part that may delay your house hunt for a while.
One issue that many mortgage applicants have to handle is when their employer won’t provide proof of income to a mortgage lender. Since income verification is vital to the mortgage application process, it’s important to make sure you can provide all of your income details from the last 2 years to the lender.
Sometimes there are issues with contacting employers, such as when your former place of employment goes out of business. Or, you may be a freelance or contract worker with atypical forms of income verification. Regardless, make sure you are clear with your loan officer regarding your employment history.
Other common causes for denial of an application include problems with your down payment (such as not meeting the required down payment amount) and credit history issues, such as having a lower score than you thought.
Credit score lower than expected
It’s not uncommon for a lender to run a credit check and come up with a score that is lower than you anticipated. Since scores change on a monthly basis, and since there are differences between the scores provided by the three major credit bureaus, you might find that your lender found a score slightly lower than what thought.
If the score is drastically different, however, this could be a sign of two things. First, make sure that you haven’t recently made multiple credit inquiries (such as applying to several lenders who perform credit checks) or by opening new credit cards or loans. These inquiries temporarily lower your credit score.
If you haven’t recently made any inquiries (other than applying for a mortgage with your lender of choice), then it’s a good idea to get a detailed credit report and scrutinize it for errors. Inaccuracies on your credit report can be disputed and resolved and can give your score the boost you need to be competitive on your mortgage application.
Choosing a different lender
While most lenders use similar criteria in determining your borrowing eligibility, there are some differences between lenders.
For example, some lenders might take on more risk by lending to someone with a lower credit score. However, they will also likely require a higher interest rate in exchange for the added risk they’ve acquired.
Now that you know your options for what to do when an application is denied, you’re well-equipped to start tackling the issue and getting back on track to becoming a homeowner.