Getting a pre-approval for a home mortgage is the first and most important step of the home buying process. When you get your first pre-approval letter from a home lender, you are on your way to home ownership.
First, you will need to know how much you can get a home loan for. Knowing what houses are in your budget narrows down what kind of listings your local realter will be showing you.
Your loan estimate from your home lender will show how much cash is required for the down payment and closing costs on your new property choice. You may need to save up money for awhile longer, sell other assets or seek other funding solutions. No matter the scenario, you’ll be better prepared to pick your home and buy it.
From beginning to end you can count on the entire process taking about 10 to 12 weeks. Once your home’s offer is accepted, you’ll often have up to a 45 day escrow period before the sale is completely wrapped up. Well prepared new home buyers who pay cash have been known to move much quicker as well.
When you are looking to buy in a sellers’ market, this means increasing demand has driven up home prices. Here are some demand drivers:
- Lower interest rates
- Short term spike in interest rates
- Lower inventory of homes available in an area
- Economic indicators like a new labor market or jobs in your area of interest.
Most home shoppers pay very little if anything to a real estate agent to buy their home. Listing brokers and buyer’s agents are paid from the seller. When a home is sold, the listing broker will split the listing fee with the buyer’s agent, this means buyers are not the ones that pay their agents.
Many loan programs require a FICO score to be over a certain number, however, there are many options for first time home buyers that lower this number. While there is no way to be certain, you want the best credit score possible. Should you not have a great credit score, don’t panic, there are plenty of options out there for people in any credit situation.