You can get pre-qualified for a mortgage, which simply gives you an estimate of how much a lender may be willing to lend based on your income and debts. But as you get closer to buying a home, it’s smart to get a preapproval, where the lender thoroughly examines your finances and confirms in writing how much it's willing to lend you, and under what terms. Having a preapproval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who haven’t taken this step.
Enlisting the help of a real estate agent can make your search much easier. According to the National Association of Realtors, 88 percent of all buyers in 2017 purchased their home through an agent. A good real estate agent will inform you on the home buying process and provide their expertise on local market trends. In addition, they will connect you with listings within your price range that best suit your needs, as well as help negotiate the purchase price.
First-time home-buyers are sometimes surprised when they see how closing costs can add up. The average amount is 3% to 6% of the price of the home. Given that range, it's a wise idea to start with 2%-2.5% of the total cost of the house, in savings, to account for closing costs. Thus our $300,000 first-time home buyer should sock away about $6,000-$7,500 to cover the back end of their buying experience. Tallying the recommended savings so far, the amount comes to $36,000-$37,500.
Buying a home is exciting, especially when you're buying for the first time. In the midst of all of the excitement, it's easy to become blinded by beautiful back-splashes, granite and quartz counter tops, hardwood floors, and fenced-in backyards. While looking at homes that are completely perfect from top to bottom, you may begin to rationalize a larger purchase than you had originally planned for — "This house is perfect for me; it's worth $50,000 extra dollars for me to have a house with enough space in a perfect location," or "We were planning on spending a little bit of money on painting; we can spend $50,000 extra on this house because it doesn't need any work."

1. Credit history. Run a credit report on yourself – which is free to do once a year and doesn’t affect your credit by going to annualcreditreport.com and receiving a report from each the three major credit-reporting agencies – and focus on the areas you can improve. You may have credit card balances to pay off, or a few missed student loan payments from a couple years ago. You may also simply need more time to pass from a recent borrowing mistake. The more time that passes from the last blemish on your credit report, the less likely a lender is to consider it a red flag to give you a loan.
Next, decide which mortgage makes the most sense for you. There are plenty of different options to consider. Although Gilmour advises choosing one of the most common two: a fixed-rate mortgage, in which your interest rate remains steady for the duration of the loan, or an adjustable rate mortgage (ARM), in which your rate fluctuates to reflect market changes.
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Minneapolis-St. Paul scores high for its flourishing job market and quality of life, but the area increases its appeal with a low cost of living. The Twin Cities have a median home value of $223,995, according to Zillow, which is slightly over the national average at $211,731. But residents still only pay 25.71 percent of the blended annual household income toward housing and utilities.
 “Transfer documents” refers to the documents relating to the transfer of ownership from the seller to the buyer. Most documents will be signed by the seller and delivered to the buyer for your review. Documents include: 1) deed, 2) bill of sale, 3) affidavit of title (or seller’s affidavit), 4) transfer tax declaration, 5) transfer tax declaration, and 6) buyer / seller settlement statement. It’s important that you do your due diligence and read through the transfer documents to make sure everything says what it should say.
Before a person begins the process of buying a house he or she will need to know what they can afford. Typically this comes down to how much of a loan he or she can obtain. One route to take is to get pre-qualified. The pre-qualification process is one in which a mortgage company interviews the home buyer and asks questions about the individuals finances, including debts. An estimate of how much the buyer can afford is given at the end of the interview.
If you already own a home, simply call your insurance agent and let them know you’re buying a new home. They will handle writing a new policy. If you don’t have an insurance agent, now’s the time to find one because your lender will require homeowners insurance. Even if you don’t have a mortgage, insurance is a critical part of protecting your investment. You’ll also want to give utility companies your move-in date to establish service. There’s nothing like moving into a cold, dark house because you didn’t get an account with the power company!
Getting pre-qualified for a home loan is a critical step in the mortgage process. Do so by approaching a mortgage lender or a bank and provide them with the necessary loan document information to get approved for a home loan. That includes your annual income, your household debt and your household assets -- and in some cases, your tax returns (especially if you own your own business.) Once you provide this information to a lender, they'll review your data and come back with a mortgage amount you're likely qualified to obtain. Normally, there is no cost to you for a mortgage pre-qualification, and you won't likely undergo a credit check -- not yet, anyway.
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Your inspector will provide a detailed report of everything in the home that could be repaired. Some of the items may not be a big deal, but some may be expensive or important repairs, such as the need for a new roof or HVAC system. You and your Realtor can request that the seller make some repairs, and the seller will have a few days to let you know whether they are willing to make the changes or reduce the price of the house. If the inspection uncovers major problems, such as termites or an unstable foundation, it can be your way out of a sales contract.

1. Credit history. Run a credit report on yourself – which is free to do once a year and doesn’t affect your credit by going to annualcreditreport.com and receiving a report from each the three major credit-reporting agencies – and focus on the areas you can improve. You may have credit card balances to pay off, or a few missed student loan payments from a couple years ago. You may also simply need more time to pass from a recent borrowing mistake. The more time that passes from the last blemish on your credit report, the less likely a lender is to consider it a red flag to give you a loan.
While getting legal aid is optional, it is always better to get a professional legal opinion on your closing documents. The complex jargon often mentioned in the property documents is difficult to understand even for the well-educated individuals. For an appropriate fee, opinion from an experienced real estate attorney can offer multiple benefits, including hints of any potential problems in the paperwork. In some states, an attorney's involvement may eventually be required by law to handle the closing.
Owning a home is expensive—much more expensive than renting, even if your monthly house payment will be similar or cheaper than your current rent amount. That’s because when you own a home, you’re responsible for all the maintenance and upkeep costs. And those can add up fast! So, before you even think about buying your first home, make sure you’re debt-free and have an emergency fund of three to six months of expenses in place.
With acute shortages of homes for sale in so many markets throughout the nation, getting a preapproval for a home loan is more important than ever. Cash buyers used to give sellers confidence that a deal would close quickly, but fewer cash buyers are shopping right now. And when houses weren’t in such short supply, buyers didn’t face the pressures of intense seller’s markets.
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