These days you can see a range of houses on the internet. You can see architectural styles, layouts, and colors and you can see the locations. The next step is to see the houses, right?
Before you begin the process of searching for a home, talk to a lender. If you use a bank or credit union, start there. Ask around for professionals who are in the business of making mortgage loans or ask a Realtor for referrals. It is very important that you have an evaluation of your financial health to determine your ability to buy a house. Make preparations; you need to know your ability to pay and how much you can afford before you go shopping.
The very first step in the process is to know what you can afford. Any other approach is wasting your time and your Realtor’s time. You may have the best credit and a down payment in the bank but you need to know what lenders want when you apply for a loan. Furthermore, in order to serve you properly, your real estate agent will need that information in the form of a pre-approval letter from your lender.
Find a lender who will listen to your questions and answer them to your satisfaction. Inquire about interest rates and requirements of the loans.
Inquire about the life of the mortgage. Some mortgages are written for 30 years; some are written for 15 years. Typically, the mortgage with the shorter term, for example, 15 years, usually has the lower interest rate and a higher mortgage payment- compared to the mortgage with the longer term, 30 years, and the higher interest rate and lower mortgage payment. Know the amount of the monthly payment for both terms and see which works best for you as you weigh the advantages. Most mortgages are written for 30 years with lower monthly payments allowing more flexibility. The advantage of a shorter term is that you pay less interest in the long run so you pay less for the house. However, if a shorter term is not convenient for your needs, the 30-year mortgage is for you. Each type of mortgage has benefits. You decide which benefits match your priorities.
Knowledge is power. Before you start searching for homes, know your numbers, know what you can afford.
Know what price range you should be using to find your dream home.