How Much Can I Afford?
Before you go out looking for a home, you can get an idea of what you can afford by using finance tools and calculators. This will help you estimate how much mortgage you can handle but having a face to face with a loan officer is key.
Pre-Qualification vs. Pre-Approval
Pre-qualification is just a guesstimate of how much you could afford. But with a pre-approval, it’s just that: getting your mortgage approved prior to going out and looking for a new home so you don’t look at homes you cannot afford or miss others that you didn’t know you could afford.
Your loan officer will show you which items you should bring to apply so neither of you will need to wait for various written income, asset and liability information. So you could get a loan decision in just days. And when you apply online , you can get your approval quickly!
Making an Offer
Time for nervous anticipation. You’ve found the home you want and knowing the market will indicate wether you have to act fast or not. Regardless, you want to be as calm and objective as possible.
Negotiating The Buy
Your offer is accepted! Be prepared for counter offers. Don’t let the pressure get to you. Remain patient, and let Brian act as your liaison with the seller or the seller’s agent. You may need to be flexible on price, closing date, appliances and repairs.
While contingencies for inspections and loans are important to protect the buyer they may have to be shortened to be competitive against other offers. However, if you currently own a home, your offer may need to be contingent on it selling. Or, if you’re uncertain about the structural integrity of the home, you may want to have a home inspection contingency. Just be aware any contingency could take you out of the running if a non-contingent offer is presented. Again, Brian will guide you with current market data so you can offer in the strongest position possible.
Once your offer is accepted, be prepared to seal the deal with earnest money. Earnest money is usually a percentage of the home’s purchase price that indicates you’re serious about the purchase and indicates your good faith. It’s generally applied to the purchase price when you complete the purchase, but may be forfeited to the seller if you fail to complete the purchase. Contact Brian to determine the amount of earnest money you should be prepared to pay based on your target home price.
Many first-time buyers are taken by surprise when it comes to earnest money, especially if they have to make a fast offer. Be sure to discuss with Brian the appropriate amount of earnest money you should be prepared to pay based on the price range of properties you’re looking at. You should have this amount available in your checking account so you can write out an earnest money check on the day you sign your purchase agreement.