So You’re Ready To Buy?
Market Buzz is a weekly column written by Bethel resident and Realtor® Pat Forger.
So, You’re Ready To Buy? (GULP!) ~ By Pat Forger
You made the choice and realized that the time is right to buy your first home. Home prices are the lowest they have been in years. Interest rates for mortgages cannot be beat. But, you’re wondering, where do I start? Here are some tips to give you the best possible advantage for finding the home of your dreams.
Be prepared! Did you know that Connecticut consumers may obtain a free copy of their credit report once a year? The Federal Trade Commission amended the Fair Credit Reporting Act by requiring that the three nationwide consumer reporting agencies – Equifax, Experian, and Trans Union – provide to consumers, upon their request, a free copy of their credit report once every 12 months. If you are married, you should get the reports for both of you. Mistakes can happen and the earlier you spot them the better position you will be in to fix them.
Take a long hard look at your finances! You may be used to paying rent, utilities and tenant’s insurance. If you are not on a budget, now is the time to prepare one. When buying a home, you will be paying a monthly mortgage, real estate taxes, homeowner’s insurance on top of utilities and other expenses. You will also be responsible for maintaining your own home – there won’t be a landlord to call if you find a leak or an appliance breaks down.
Do you qualify for financing? Call your local bank where your accounts are and tell them you are ready to purchase a home and want to meet with a loan officer. You want to be pre-approved for a mortgage not pre-qualified. Pre-Qualified simply means that you have spoken with a loan officer and have given them your overall financial picture. After evaluating your information the loan officer can give you an estimate of the mortgage amount for which you may qualify. Pre-Approval is much more involved. You will complete a mortgage application (and usually pay the application fee) and provide the lender with your last 2 years of income tax returns, recent paystubs and bank statements so that they can do an in depth analysis of your financial situation and current credit rating. Once that has been done, you will receive a conditional commitment in writing for the exact amount of the mortgage that you are qualified to receive. Having that in hand, brings us to the next step.
Contact a Realtor®! It is so important to have a Realtor® represent your interests as the Buyer. When you have that Pre-Approval in hand, you can meet with your Realtor® and review what it is you can afford to buy. Why waste time looking at homes that you think you can afford and look at homes that you can afford! Remember, too, that when meeting with your Realtor® you will be signing an agency agreement between yourself and them. There is always a term limit in the agreement and think about a three month term to start. That way, it gives all of you the time to get to know one another and to make sure the connection fits.
Do you want a condominium or a single family home? The best way to determine that is to look at both! With a condominium you are normally not responsible for maintenance of the outside of your unit. Someone else will mow the grass and remove the snow. However, that comes at a price by way of a monthly payment called “common charges” that is paid to the Association that manages the condominium complex. With a single family home you are the maintenance person – are you ready for that?
Next time – what exactly are you looking for in a home?
Pat Forger, Sales Executive, Realtor®