I will stop short at saying my husband and I have become experts at moving, buying and selling homes. We have bought 5 homes and have sold 4 primary residence from just moving so often. We are currently in the process of getting ready to sell our 5th and buy our 6th home. Buying a home is a scary process if you dont know what to expect. It can also be a traumatic experience if you get caught up in a horrible mortgage company. (which we have had!) Here are a few things we have learned a long the way that may help save you some headaches and make your home buying experience a lot better.
Know what your credit looks like
Our favorite app, to keep track of our credit, is Credit Karma. (know this isn't going to be the same score your broker pulls but it will be a good tool). Do not get to a Mortgage Broker and be "surprised" by what they find. KNOW ahead of time!! If it is something you can fix, do it before you go into their office and find out you aren't in a position to buy. Pay off some debts. DO NOT close credit accounts! Make sure you have a GREAT payment history. If you have things in collections call them and see if they will take those items off if you pay them off. Sometimes they will if you pay it in full and sometimes they wont if you take a settlement...make sure you specify.
There are different schools of thought on this next thing I am going to say, but it has worked for us so I thought I would share.
The key for us in keeping my husbands credit score high is having credit cards. That doesn't mean you need to max them out or use them daily, but do keep a rolling balance. It shows self control and it will show that you have a history of making payments on time! Which is a huge deal in buying a home.
Know your budget.
This does NOT mean you take what you "qualify for" and buy a house for that amount. My husband and I "qualified" for a $500,000 loan when we first got married and we weren't even making $100,000 a year! That mortgage broker was out of his mind and it would have ruined our lives if we would have purchased a home for that price. We were paying $1,100 in rent so we KNEW we could comfortably pay that in a mortgage. --the word here is comfortably! Not house broke...Also keep in mind you will have things break so don't stretch yourself so thin that you can't put money away for those things that need to be fixed.
Plenty of apps our there to help plan your expenses.
Finding a realtor and a mortgage broker.
This is one of those things that: what came first the chicken or the egg.. kind of scenarios. MOST great realtors have GREAT mortgage brokers. They go hand in hand. I would first go online and read reviews. Read the reviews for how they sold a home, how they helped buyers buy a home and THEN go online and check out their listings. If they can't spell correctly, dont have pictures of the inside of their homes and the pictures they did take are TERRIBLE--DO NOT CALL THEM. If this realtor can't take the time to take half decent pictures of the home they want to sell they WILL NOT care about finding you a home--just trust me. Also take note: Mortgage brokers should never ASK you for money. They should never ASK you to write them a personal check or they should NEVER demand money before you can close, all that will be done through the title company!! We have been lucky to have had some amazing realtors...and not so good ones. A key component is communication, speed, accuracy and honesty. These are not all congruent within the realtor world and I promise you, you need them all. The only way you are going to be able to find the best realtor is by INTERVEWING for the job. You are going to be paying them at the closing table and you want to make sure that they have earned their money!
Our closing in Utah. I had just had a baby a few weeks previous to this...can you see that new momma tiredness in my eyes? My husband (on the left) looks tired from moving! Then there is my son...happy to just be alive! With our Real Estate Agent Jennifer Yorgeson and our Mortgage Broker Jamon Taylor from Academy Mortgage. Best team in the world right there if you are in Utah!
Down Payment
A lot of people get caught up in thinking they need 20% saved to put down as a down payment. If that is what you want to do fine, but it isn't a must. Depending on where you want to buy, your income and a lot of other variables you may not HAVE to have a down payment at all. You will need a mortgage broker to talk to who will explain all your options.
Pre-qualification Letter
You have found a realtor, have a fantastic mortgage broker now the next thing to do is- get pre-qualified. Sellers want to know you are serious about buying a home. The five homes we have purchased all five have asked for that letter. I know my husband qualifies for A LOT more than what we want to purchase, so we give the mortgage broker what we WANT to qualify for. This isn't to say he has to meet that number, but it is a number we feel comfortable telling others what we want to spend on a home. (If this is your case and you find a home that is over the "pre-qualified" amount, just have them rewrite the letter) ** learned the hard way**
Sometimes your credit score will need to be repaired. Don't be embarrassed it happens to the best of us. Depending on what needs to be repaired it may take up to seven years to not be seen on your credit. I will write a blog post explaining how to do this.
House Hunting
Be realistic. I know what you are thinking, but what I have learned about our homes is almost anything can be changed. Except two things: Location and Floor plan. (Obviously there are exceptions to these cases, but as a general rule those are the two) When you start looking, understand your budget and the homes that are in those budgets are going to be key in finding your home. If the average home is selling for $250,000 and your budget is $100,000 plan on your home needing a lot of work or know that it is not going to be EXACTLY how you want it. What are the deal breakers for you and start there.
What are your deal breakers?
Be firm on your budget
We have had realtors that have shown us homes that were WAAAAY out of our budget and it made me angry. They knew our budget, but wanted to show us homes that they knew we couldn't afford. DO NOT fall for this trick. If they say "well I can get you a deal because...." stop them right there. The top of your budget is the TOP of your budget. End of story.
There are so many others, but these are a few of the biggies...Let me know what things you learned buying a home.
