Before getting a home loan, you should always check your credit. According to the law, you're allowed to receive one free copy of your credit report per year. Scores range from approximately 300 to 850; generally, the higher your score, the better loan you'll qualify for. Don't forget to check your report for errors. If there are any, dispute them. It may help your credit score. You can also check your credit score for free at www.creditkarma.com.
It may seem impossible to find the right lender in the sea of mortgage lenders. Give us a call or send us an email and we will provide you with a list of preferred mortgage lenders who are experienced, professional and will get you the best rate possible while educating you about the mortgage market.
Once you have the right mortgage lender you will receive a pre-approval letter. Pre-qualifications are only a guess based on what you tell the lender, whereas a pre-approval will give you a better idea of how much you qualify for. The lender will pull your credit and get more information about you. Employment history, hourly wages, income tax returns, paystubs, bank statements to verify income and much more. In our fast paced Pacific Northwest market sellers do not accept offers unless accompanied by a pre-approval letter or a Proof of Funds for Cash buyers.
Make a list of the things you want to have in the house. Ask yourself how many bedrooms and bathrooms you'll need and get an idea of how much space you desire. How big do you want the kitchen to be? Do you need lots of closets and cabinet space? Do you need a big yard? Most importantly, be prepared to compromise.
Once you've made a list of your must-have's, don't forget to think about the neighborhood, types of schools in the area, the length of your commute to and from work, and the convenience of local shopping. Take into account your safety concerns as well as how long you plan on staying in the area.
Once we search the marketplace and find the home you want, you'll want to make an offer. Most of the Pacific Northwest market currently has less than one month worth of inventory. Sellers are receiving multiple offers depending on the price range, homes are selling hours, not days or weeks, and buyers are being very aggressive. In an ultra-fast paced market like ours, you need experienced brokers who can negotiate with sellers and cooperating brokers to get your offer accepted.
There are many different types of mortgage programs out there, but as a first-time home buyer, you should be aware of the three basic: adjustable rate, fixed rate and interest-only. Your lender will help you decides which is best for your situation.
Adjustable rate mortgages (ARMs) are mortgages that offer an interest rate that is fixed for a short period of time, usually between one to seven years. After that, the interest rate can adjust every year up or down, depending on the market.
Fixed-rate mortgages are more traditional and offer a fixed interest rate (and thus a fixed monthly payment) for a longer period of time, usually 15 or 30 years, though they're available in 20 or 25 year terms.
Both fixed and adjustable rate mortgages can have an interest-only payment. What this means is that for a certain amount of time during the loan term, you're allowed to pay only enough to cover the interest portion of your payment. You can still pay principal when you wish, but don't have to if your budget is tight. There is a myth that with interest-only mortgages, you don't build equity. This is not necessarily true, since you can build equity through home appreciation. The benefit to interest-only mortgages is that you increase your cash flow by not paying principal.
Remember to ask your mortgage lender lots of questions about which mortgage is right for you and your situation.
We always recommend a home inspection. It will be well-worth the money spent since it ensures that you are aware the property's structural soundness and condition. This decision however depends on current events at the time you choose to write an offer. In a highly competitive multiple offer situation, waiving the inspection may be a consideration for some buyers. Other inspections may include a roof inspection, plumbing inspection, well inspection for individual wells, or a septic inspection for homes served by a onsite septic system instead of public sewer.
Be sure you talk to your mortgage lender to understand all the costs that will be involved with the closing so there are no surprises. Closing costs will likely include (but are not limited to) your down payment, title fees, escrow fees, appraisal fees, attorney fees, and points you may have bought to buy down your interest rate. Once all contingencies have been satisfied or waived, the contract has been fully executed, and you have received closing disclosures, your lender will deliver your loan documents to the escrow company and make arrangements for signings. After all parties have signed, the lender will review all the documents during their final underwriting process, release the funds for escrow to disburse, and the escrow company will have the closing recorded at the County. Closed!
You've got your mortgage, closed the transaction and now it's time to move in! Whether you use a mover or not is up to you, depending on your financial situation and how much stuff you have to move; perhaps also, whether you have a lot of friends willing to help you move. Either way, you're done with the home buying process! Just start unpacking and start enjoying your home! Buying a home for the first time or the fifth time doesn't have to be a hassle if you're prepared and you know what to do and when to do it. With our experience, knowledge and connections you will have a smooth home buying experience!