Saturday, August 8, 2009

How to buy a house in 25 easy steps - Part II

Click here for part I of this series

Done with steps 1-5? Are you ready to actually start looking for your new home?
Nope, not yet, false alarm.

6. Start thinking about what type of loan programs you might qualify for. Are you a veteran? First time home buyer? Are you flat busted broke or have you been saving since elementary school? All of these things can influence your next step...

7. Find a lender. Your Realtor can give you some possible connections. Is it necessary to use someone your Realtor refers? Absolutely not, but even if your Realtor pushes you in a certain direction don't assume that there is some nefarious goings on with two people conspiring to drain you of your cash. The reality is that your Realtor and lender are going to have to work closely together and if they already have a good working relationship your purchase may very well go more smoothly and quickly. In addition, your Realtor might be able to steer you toward a lender who has the type of loan program that is best for you (or someone who has the best variety of programs out there).

8. Work with your lender to determine what your budget will be. Now is where we start thinking about the actual dollar amount of your purchase. Be sure to keep in mind how much you are comfortable spending each month, not the maximum for which you qualify. Your loan originator will give you a pre-approval letter that will likely be required when you eventually submit any offers.

9. You have a lender and pre-approval, you have a budget, you have a Realtor, are you ready to look? At long last, yes. If you want to search on your own you can do so but if you come up with too many possibilities a good Realtor (like me!) can do more detailed searches to narrow down your choices and keep things from becoming overwhelming. Try not to be too specific, many buyers find that the home they eventually fall in love with doesn't have everything they originally said they wanted.

10. OK, you've found the house of your dreams - or at least the house at the beginning of your dreams. Now what? It's time to make an offer. The thing that strikes fear in the hearts of prospective home buyers the world over. It's that little piece of paper (or 40) that binds you to the biggest purchase you'll probably ever make. Makes you a little nauseous huh?

Next up, what happens after the offer...

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