6 Steps to Buying a Home

Buy a House

Trying to buy your first home can be a very overwhelming and stressful process, I mean you have never done this before, and as a first-time buyer, you would want to get the best home possible. This is an enormous step in your life which you do not want to take very lightly, and at the same time, you do not want to have sleepless nights wondering if you would find the right home for the right price and, would you still love this home after a year or two?

These are all valid questions, but in order not to stress yourself, here are six steps to buying a home.

  1. Prepare Documents – Most, if not all real estate agents would not work with a client who has not been pre-approved for a mortgage. This is a major key in wanting to buy a home, as this enables you to know how much you can afford to purchase a house and this is also an excellent way to know your credit score, as it would be taken into great consideration before you get approved for a mortgage.
  2. Find the Right Agent –  while most people think having a real estate agent is not very important when buying a home. There are very many significant advantages to having one especially a real estate agent such as myself who is in your community. Real estate agents know who to meet in a particular community to get information and to even help carry out renovations on your new home at a very cheap rate. Never underestimate the need for a real estate agent.
  3. Find the Right Lender –  as most contracts in the real estate market include a mortgage contingency; time is a major factor here as you want to get the loan before the deadline to secure the loan. Not securing the loan can mean you would not be able to buy a home, so try a much as possible to please your lender and get the loan as soon as possible.
  4. Find the Perfect Home – after getting both a real estate agent and the loan you desire, tell your agent exactly the type of home you need, give them the details clearly and vividly and also take your budget into consideration. If you, however, find a home or wish to buy a particular house you have seen before, give all the details to your agent and they would set up a showing for you. You can even visit open houses to see different homes and the one which suits you best. Take the appropriate time you need to select a home; there is no rush.
  5. Make an Offer –  when you find exactly what you are looking for, it would be time to make an offer. However, talk things over first with your agent as a good agent would check market statistics in that area or region and this can get you to save a lot of money especially if houses in that area are not being sold for top dollar. Evidently, the price would not be the same price the seller would want, so expect some counteroffers before both of you hopefully settle on an agreeable price.
  6. Closing – Set a date maybe three to four weeks away, after coming to an agreement on the price, which would be the closing day for the transaction. On the closing day, in particular, visit the home one last time and check it out for yourself, check for any hidden damages or other problems which were not evident before. If all is well then that is perfect, finalize the deal by signing all the contracts with the title company and as simple as that you have your home.

How a Foreclosure Will Affect Your Future

ForeclosureSince the recession began, more than 4 million homes have been foreclosed upon. If you’re one of the homeowners whose home was or is being foreclosed upon, you may be wondering what’s going to happen next. How long will the foreclosure process take and how will it impact your financial future? This guide can help.

Will a foreclosure impact my credit score?

Unfortunately, a foreclosure hurts your credit score, which means that it will be harder and sometimes impossible to get credit cards and loans in the coming years and that you can expect to pay higher interest rates. Plus, some employers look at your credit score, which means that it may make it more difficult to land a job.

Experts estimate that a foreclosure will lead to a dip in your credit score of about 200 or 300 points. So let’s say you had a near-perfect 800 FICO score pre-foreclosure; after the foreclosure, you might have a credit score that was more in the 600 or lower range, which is considered bad (FICO scores range from 300 to 850).

The good news is that foreclosures will clear your credit report after seven years, and that if it was an isolated incident — you didn’t also default on a bunch of other payments — it won’t have as large of an impact on your credit score. Going forward, try to pay all of your bills on time and minimize the amount of money you owe, as these can help boost your credit score.

How long do I have to wait until I can buy a home again?

If you’ve been through a foreclosure, you can expect to have to wait between about three and seven years — depending on why you defaulted, your current credit score and the type of loan you’re applying for, among other factors — before buying a home again.

Buyers who lost their homes due to economic hardships such as losing their job, illness or getting a divorce may have to wait less time to buy a home than those who walked away from an underwater mortgage even though they were able to pay or those who couldn’t pay once the rate increases on their adjustable-rate mortgage kicked in, experts say. Potential buyers must show that since the foreclosure they have raised their credit score significantly by paying all bills on time and not taking on too much debt. The time period you have to wait before buying again also depends on your lender.

For example, Fannie Mae requires borrowers to wait five to seven years to buy after a foreclosure and three to seven after a foreclosure with “extenuating circumstances’ (which are factors such as illness and severe injury that were beyond your control).

For more information on foreclosures and to read the full blog from Zillow, click here.