Buying a home is one of life's major events. It can be exciting, terrifying and everything in between. Being well-informed about the home-buying process will help to ensure that you have a low-stress, yet productive experience.
Here are some important steps to familiarize yourself with before you search for your dream home.
Know what you qualify for
Before you start house hunting, it's best to know what loan amount you qualify for. This will help narrow your focus and allow you to choose a home that is within your budget.
The best way to do this is to meet with a lender. Online calculators are a useful tool in estimating your payment and debt-to-income ratios, but they are really meant to give you a basic idea of what you qualify for. Meeting with a licensed loan officer is the better, more personalized option. A licensed loan officer will answer questions you have in ways that an online calculator cannot.
Many factors come into play when determining the amount of mortgage you qualify for, such as credit scores, credit history, employment history, salary and tax history. Discussing pre-qualification with a loan officer will give you a clear picture of your personal home-buying situation, something an online calculator can't do.
Get pre-qualified for the right mortgage program
A credit union or mortgage lender will work with you one-on-one to help you prepare for the home-buying process. For example, a loan originator is someone who will be assigned to process your application.
"Your loan originator is a mortgage expert and will provide help and guidance along the way," according to Lafayette Federal Credit Union. "If your request wasn't approved online, they'll ask you for any information required to make a decision about your loan."
You then will be issued a pre-qualification letter. Having a pre-qualification letter in hand when you start meeting with an agent and seeing homes gives you an advantage over other buyers because you are in a position to quickly put in an offer on the right home.
Your loan officer will discuss your options, which will be based on factors such as how long you plan on staying in the home and how much you have for a down payment.
Use a real estate agent
Buying a home can be a complex journey. A good real estate agent can help to navigate the home-buying process, which is especially beneficial for first-time home-buyers.
Aside from helping you make an offer once you find the perfect home, an agent brings skills and knowledge to the table throughout the process. An agent can help you focus on your needs in a home, keep you updated on new listings and recommend professionals whose services you may need, such as title companies and home inspectors.
Some home sellers may prefer to not use agents in order to avoid paying a commission. However, most buyers find that having a real estate agent is worth it to ensure everything goes smoothly.
Stay vigilant after the offer is accepted
Once the seller accepts your offer, you will have the chance to get an appraisal, have a home inspection, conduct radon tests and do a title search. Having an intermediary, such as a real estate agent, will prove invaluable, given the many variables that come into play during this period before the loan is finalized.
Once you've done your due diligence and have met any conditions for your loan, you are ready to close. You will receive your final closing documents, which will outline the details of your loan — including how much cash to bring to closing, the final loan amount and so on. Review the documents, ask questions and make any changes before you sign.
To guide you through the home-buying process, take advantage of the expertise at Lafayette Federal Credit Union. In addition to offering one-on-one guidance, the credit union offers free home-buying seminars at Nationals Park before several games throughout the season, starting with the Nationals vs. Pirates game on April 30. In addition to receiving invaluable information, you will also get free game tickets and food and beverage credits.