Buying your first home is both exhilarating and intimidating. After all, taking out a loan for a few hundred thousand dollars isn’t an everyday occurrence for most of us. It doesn’t matter if it’s your first or fifth home; for the most part, the drill is similar. If you want to achieve an optimum outcome — and you do — there’s a process to follow and pitfalls to avoid. The good news is that you don’t have to go it alone. Our expert loan professionals are here to guide and prepare you for the exciting road ahead.
4 Do’s when buying a home:
1. Do learn about your VA home loan benefit
At Aligned Mortgage, we believe that all veterans and active-duty military members should educate themselves on the benefits they’ve earned while defending their country. Each month, Aligned Mortgage offers free VA home loan seminars that provide participants a look at the inner workings of the VA home loan. We’ll dispel myths and uncover the truth about your benefit, and answer any questions you may have about purchasing a home with your VA entitlement.
- Click here to reserve your seat today. Register here
- Download our free VA guide here for more information.
- Speak with an Aligned Mortgage VA loan expert today.
2. Do get your finances shipshape
Listen, we know how tempting it is to start hitting open houses when the itch strikes to buy. But that’s putting the proverbial horse way before the cart, and you’re setting yourself up for disappointment if you unknowingly look at homes far above your price range. Before touring houses, make sure you’re financially prepared to make the purchase.
- Check your credit score. If it’s too low, there are measures you can take to boost it.
- Pay your bills when they’re due. This is not the time to make late payments on your rent, car loans, or credit cards. And if you’re carrying debts on several credit cards, consider transferring them to a single card with the lowest interest rate.
- Control your debt – buying a home is easily the most expensive purchase you’ll make in your lifetime, now is the time to watch your spending.
- No new purchases
- Save money where you can. There is no down payment required for a VA loan, but there could be closing costs associated with your loan.
- Learn how to manage your credit here.
3. Do get preapproved
- Speak with a VA loan expert to get preapproved. They will answer any questions you have, review your documentation and credit report, and run your loan application through an Automated Underwriting System.
- A pre-approval determines precisely how much buying power you have, which, in turn, lets you know exactly how much house you can afford.
- Having a preapproval in hand when you begin searching for a home will advance your chances of getting your offer accepted because the seller can see you’re a serious buyer.
4. Do find a real estate agent
On average, two-thirds of the home buyers take about three months to go from searching for a house to getting under contract. When it comes to the home-buying process, you’ll need all the help you can get. As your mortgage lender, we’ll guide you through your home’s financing, and your real estate agent will guide you through the business of finding and buying your home.
- Your real estate agent will listen to your wish list, understand your needs and lead you to neighborhoods with the best overall value.
- Your agent becomes your advocate and, as an expert, will coordinate showings and assist you in making sure that the properties you see are within your budget and in good condition.
- Your agent will help you to keep resale value in mind as you weigh the pros and cons of a property. A good agent will make sure you look beyond the home’s physical attributes and consider the location. Are there any planned future developments in the area? For instance, is that bird refuge ever going to make way for a high-rise? Are the schools any good? Are they within walking distance? What about noise pollution from nearby airports or railroad tracks?
- When you decide on the ideal house, your agent will write up a sales contract and submit offers, and when the seller accepts, you’ll go into escrow and start the official loan process.
- As the buyer, you don’t pay your agent’s commission; the seller does.
5 Don’ts when buying a home:
1. Don’t quit or change your job
- This is a time to stay the course and keep a steady head as you march toward your goal of homeownership. Lenders are qualifying you based on your income and credit. Changing your income can change your approved amount.
2. Don’t apply for new credit or co-sign for anyone
- This could negatively affect your credit or debt-to-income ratio, which also can change your approved amount.
3. Don’t make any significant purchases during the loan process
- Hide those credit cards from yourself, and wait until after you own the home before buying that bedroom set and monster flat screen for the living room.
4. Don’t pay off loans, collections, or credit cards without discussing it with your loan specialist first
- Doing so could affect your credit profile and, again, could change your approval amount.
5. Don’t forget about closing costs
- If you’re a first-time buyer, it’s tempting to focus only on the asking price, but you also need to estimate your closing costs when figuring your budget. Typically, they can range from 2 to 5 percent of the purchase price.
Do you think you’re ready to purchase a home? If so, please give us a call at Aligned Mortgage and let our dedicated loan professionals walk you through the exciting adventure of homeownership and building that all-important equity.