Serving all of SW Missouri
417-844-2661
hewesterman@hotmail.com

[5] Home buying; planning ahead

Serving all of SW Missouri

[5] Home buying; planning ahead

By Ed Westerman, Broker
Country Lifestyle Realty, L.L.C.
Call or Text 417-844-2626

[5] Home buying; planning ahead

Developing a buying plan gives you confidence and reduces stress.

  • Start a Savings account specifically for a home purchase.
  • Get your credit in order
  • How much home can you afford?
  • Create a list of desired “features.”
  • Where would you like to live?
  • Get Ready to be prequalified.
  • Use an experienced Buyers Agent.

Start A HOME BUYING Savings ACCOUNT

Anytime is a good time to start saving, but wanting to buy a home makes it a MUST START NOW time. Get some advice from your potential lender or banker concerning making large bank deposits before applying for a loan.  Done improperly this too could affect your borrowing qualification ability.

Get your credit in order before applying for a loan 

You can get a free credit check annually at any one of the three credit bureaus.  You are entitled to one free copy of your credit report every 12 months from each of the three reporting companies, TransUnion, Equifax, and Experian.  Order it online from annualcreditreport.com, the only “authorized” website for free credit reports.  You can order by phone at 1-877-322-8228.

I recommend that all buyers have a verbal family agreement to NOT make any more credit purchases until after closing on your home.  Doing so can adversely affect your credit score as well as financial ability to repay your loan. 

Use an experienced Buyers Agent

Buying a home is one of buyers most exciting times of life.  Important enough to warrant careful and prudent decisions all thru-out your home buying process.  A buyer’s agent will represent “YOU as the buyer” and help you with advice and guidance along the way, thus helping the you to avoid making a mistake that might lead to future headaches.

You might be asking yourself, “should I hire a buyer’s agent when buying a home?  It will be helpful to know; a buyer’s agent will get paid for their time but paying the buyer’s agent typically is not the buyer’s responsibility.  Buyer’s agents generally get paid out of the selling agent’s commission.  And since a buyer’s agent is getting paid for his efforts he will be dedicated to looking out for a buyer’s best interest and they will work hard to get the buyer the best deal possible.

How much home can you afford? 

There is a saying among real estate agents and some loan people that “you can afford a home priced 2 to 3 times your gross income.”  But they will be quick to remind you, this is only a rough guess. You will be wise to put together a home buying plan with current personal operating budget for now and for after you buy a home.  Discuss this

with your buyer’s agent, he/she will help you find what you can comfortably afford.

These items should be included in your budget:

  • Your Monthly Mortgage Payment
  • Will there be any Home Owner Association dues or fees?
  • Property Taxes (many times this will be in your payment escrow)
  • Home Owners Insurance (many times this will be in your payment escrow)
  • Routine repairs and maintenance.
  • Utilities, TV, and Telephone.

Create a list of desired “features” 

Doing this can help prepare you for your home search.  Here are some examples.

  • All brick?
  • Must have air conditioning?
  • All electric?
  • Newer roof?
  • Hardwood floors?
  • Number of bedrooms?
  • Number of baths and half baths?
  • Number of cars garage?
  • Size of lot or acreage?
  • Etc.

Discuss this with your buyer’s agent; he/she will help you find what you can afford with the amenities that you need.

Where would you like to live?

A buyer’s Agent can be very helpful with this.  I am very familiar with
SW Missouri and have exceptional knowledge of local real estate process.  If you are looking for a home in this area I would be pleased to help you find the right home.

Get Ready to be prequalified

There are several financing options for you to consider.  The longer the loan, the smaller you monthly payment will be.  A fixed-rate mortgage will offer a fixed consistent payment while an adjustable-rate [ARM] mortgage offers a lower payment.  But the adjustable-rate mortgage may adjust upward and negatively affect one’s cash flow.  You can plug the payments estimates into your after purchase budget estimate to see which options work best for you.

You have several options for home loan types.

Conventional  5% down payment

VA  100% financing

FHA  3.5% down payment

USDA-Rural Development  100% financing in select areas

Here is briefly what you will need to get preapproved.  You’ll supply documentation such as w-2 forms, pay stubs, tax records and proof of assets. Once the lender verifies your financial information and your employment, which may take a few days, it will likely supply a preapproval letter.  It will show how much house you’re qualified to buy. You can then show this letter to a real estate agent or seller to prove you’re ready and able to purchase a home.

Self-employed persons will need to supply your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years minimum. 

Ask the Loan Company to go over all costs in detail

When you have found the right home you will finalize the mortgage loan application with the lender that provided you a pre-approval letter. When you are approved, the lender will provide papers which will show the amount of money you will need for closing.  It will detail each cost. Get a printout so you can study it.  You can even ask your buyer’s Agent and/or your lender questions relating to closing costs etc.  Make a list of questions to ask your lender.

If you are looking for a home in this area but you don’t want to dig for hours and hours thru online listings to find your next home….I will do that for you.  I am a local Real Estate Broker with over 40 years experience and I am very familiar with SW Missouri and I have exceptional knowledge of the local real estate process.

Call or Text 417-844-2626

Email me here   broker@countrylifestylerealty.com

I will work for you.

Ed