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Most home sale contracts give the buyer about 10 days to complete a home inspection. If you’re getting a mortgage to buy the house, your lender will likely require you to use a certified home inspector. (Even if you’re not required to get a home inspection, it’s best to get one anyway to make sure you’re not buying a house full of expensive problems.)
1) Get your credit in as good shape as possible. Your credit score can make a big difference in your mortgage interest rate. You can use sites like creditkarma.com (which uses TransUnion and Equifax) and freecreditscore.com (which uses Experian) to get free credit scores from all three credit bureaus, free credit monitoring to alert you of any changes to your credit, and advice on how to improve your credit scores. The key things are to make sure you make your debt payments on time, pay off as much of your debt as possible (except perhaps car and student loans, which tend to have relatively low interest rates), and be careful of closing credit card accounts. If you have a credit card that is charging you an annual fee, see if you can convert the card into a no-fee card rather than close it.
Getting prequalified is the first step in the mortgage process (it’s usually pretty simple). You give your lender your overall financial picture, the lender evaluates your information, and then the lender gives you an idea of the mortgage amount that you will qualify for. Note, that prequalification is not a done deal – you may not in fact qualify for the loan for which you are preapproved (it’s a general idea).

Chances are your home inspection report will turn up some problems with the home — but, keep in mind, not all repairs are created equal. There are major issues that will likely need to be dealt with before a lender will honor a home loan, such as structural problems and building code violations. In these cases, the homeowner is responsible for repairs before the sale can go through.
Especially when you’re in a seller’s market, where there are more buyers than houses for sale, don’t be discouraged if the first house you bid on goes to another buyer. Heyer says a multiple-offer situation tends to be a double-edged sword: “If they don’t get the apartment they’re going to be bummed, at least in a bidding war, and if they do get it, they’re going to instantly feel like they overpaid, which is also a bummer.”
A real estate agent isn't always a necessity when it comes to buying a home, but he or she can be an invaluable tool for those who do work with one. An agent will understand the real estate market and lead homebuyers to the homes that they want to see. As a result this will save the home buyer time and frustration. The recommendation of friends or family members is one of the best ways to choose a real estate agent. If there are no recommendations, choose a real estate agent or agency that has a good reputation in the area. The agent should be a buyer's agent dedicated to working in the best interests of the buyer. The agent should also be someone who listens and has no problem answering any questions that are asked of him or her.

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18 percent to 22 percent. Equity loan interest is often much less and it is deductible. For many homeowners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.
Homeowners insurance is a contract that protects both you and your lender in case of loss or damage to your property. The contract is known as an insurance policy, and the periodic payment is known as an insurance premium. The monthly homeowners insurance premium is often included as part of the monthly mortgage payment, with the insurance portion of the payment going into your escrow account.
When determining how much mortgage you can afford, base this amount on what you are earning today. That is, the income that you and your spouse earn from stable sources. If you're in your last year of law school, for instance, don't assume that you will be earning much more money in a year or two, so you can afford a larger payment. If your wife is expecting a big promotion, don't base your mortgage payment off of her potential salary increase. No one can predict the future, and although you may very well be in a better financial situation a year down the road, there is no guarantee.

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!
Your agent can put you in contact with Coldwell Banker Home Loans so you can be pre-approved for a mortgage even before starting the house hunting process. Although the pre-approval is not a final loan commitment, the pre-approval letter will demonstrate your financial strength and ability to go through with the purchase when you are ready to make an offer on a home.
When you find the home you want—and you will—it’s time to make an offer. Talk to your agent about the right price to offer; it's common to make the first offer below the listed price, but in a very competitive market, you may need to offer the asking price or even more. Your real estate agent can help you gauge this, and often can get the scoop on how much competition there is for a certain home.

Prior to the closing date, the buyer will want to verify with his or her agent, lender, and escrow company that all of the necessary documents have been signed and terms met. If they have not this should be taken care of immediately to ensure that there are no last-minute problems. The buyer will also want to verify what forms of payment are acceptable. On the closing date, closing costs and fees will be paid.
PMI stands for private mortgage insurance. As part of qualifying for a conventional loan, you will have to get PMI if you put down less than 20%. Once your equity in your home reaches 20%, you can get the PMI removed (lowering your monthly mortgage payment). However, with an FHA loan, the insurance stays on the loan for the life of the loan, regardless of the equity in the loan. The private insurance on an FHA loan is called mortgage insurance premium (MIP). There is no way to avoid MIP on an FHA loan.
When you find the home you want—and you will—it’s time to make an offer. Talk to your agent about the right price to offer; it's common to make the first offer below the listed price, but in a very competitive market, you may need to offer the asking price or even more. Your real estate agent can help you gauge this, and often can get the scoop on how much competition there is for a certain home.
Next, review exactly how much you’re spending every month – and where it’s going. This will tell you how much you can allocate to a mortgage payment. “Make sure to account for every dollar you spend on utilities, kids' activities, food, car maintenance and payments, clothing, entertainment, retirement savings, regular savings, miscellaneous little items, etc., to know how and where a new mortgage payment fits into your budget,” says Liz Recchia, owner/broker at We Sell Real Estate, LLC, in Phoenix, Ariz., and author of “HELP! I Can't Make My House Payment!”

Closing a property deal can be a long and stressful exercise that involves lots of steps and procedural formalities. Closing occurs when you sign the papers that make the house yours. But before that fateful day arrives, a long list of things has to happen. This article provides important guidelines for a property buyer that must be followed during the closing process from the moment your offer is accepted to the moment you get the keys to your new home.


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.
Once the offer has been approved, the buyer will need to secure the mortgage. This is done by complete the mortgage application. If a person has not been pre-approved or pre-qualified, it will likely take longer to complete this process. Ideally, a buyer should "shop around" for the best rates and terms. Most buyers choose fixed rates rather than adjustable rates.
Down payment: Unless you’re getting a loan backed by the U.S. Department of Veterans Affairs or U.S. Department of Agriculture, you’ll probably need to put some money down. While there are benefits to putting down at least the old standard of 20% of the home’s purchase price — one of them often being a lower interest rate — some lenders now offer conventional loans for as little as 3% down, and Federal Housing Administration (or FHA) loans allow as little as 3.5% down.

Seek more than one estimate for expensive repairs, such as roof replacements. A good real estate agent should be able to give you referrals to contractors who can give you estimates. But you also should seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.
You can also order a free copy of your credit reports from each of the credit bureaus at annualcreditreport.com as long as you haven't done so in the last 12 months. One study showed that about 70% of credit reports have errors in them so check to see if there are any in yours that could be hurting your credit score and if so, be sure to have them corrected. It’s bad enough to suffer from your own mistakes. You don’t want to suffer from someone else’s too. Finally, you may want to put a security freeze on your credit reports to protect you from identity theft.
Preapproval is the second step in the mortgage process. You complete a mortgage application and provide detailed information to the lender (although you will not yet have a house picked out most likely, so the property information can be left blank). The lender will approve you for a specific amount and you will get a better idea of your interest rate. This puts you at an advantage with a seller because the seller will know you’re one step closer to getting a mortgage.
As a first-time home buyer, you’re probably accustomed to the monthly cost of renting, which usually includes your rent payment, some of the utilities, and your internet and cable bills. As a homeowner, you’ll be responsible for additional monthly costs that may have been covered by your landlord. That includes things like water, sewer and garbage bills, monthly HOAs (if you’re buying a condo) and the cost of lawn care. You’ll also be responsible for paying property taxes and homeowners insurance. And don’t forget the cost of maintenance. It’s recommended that you set aside 1-3 percent of the purchase price of the home annually to cover repairs and maintenance.
If you're thinking about making an offer on a home, take another look at your budget. This time factor in closing costs, moving expenses and any immediate repairs and appliances you may need before you can move into the home, notes Felipe Pacheco, President/CEO of Avanti Mortgage, who is based in the greater Salt Lake City area. Don’t overlook hidden costs such as the home inspection, home insurance, property taxes, homeowners association fees and more.
Once the property enters escrow, the purchase should be contingent upon it passing a home inspection. Once your offer is accepted, arrange to have an inspector visit the property and identify anything that needs to be fixed. Both you and the seller should receive a copy of the inspection report, after which you can renegotiate with the seller in case anything needs to be fixed. In worst cases, the contingency also protects you in the event that you would like to withdraw your offer.
For the past 15 years, Williams has specialized in personal finance and small business issues. His articles on personal finance and business have appeared in CNNMoney.com, The Washington Post, Entrepreneur Magazine, Forbes.com and American Express OPEN Forum. Williams is also the author of several books, including "Washed Away: How the Great Flood of 1913, America's Most Widespread Natural Disaster, Terrorized a Nation and Changed It Forever" and "C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America"

Keep your options open. Some homes might be listed as a two-bedroom, but if the square footage is in the same range as three-bedrooms you’ve been looking at. This could be a sign that it’s a hidden gem with a “secret” third bedroom. Secret bedrooms are often sunrooms that can be easily converted into a bedroom or an extra-large master that could be divided with some drywall.
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