Why should I talk to a lender to get pre approved before looking for homes?
There are several reasons why you should talk to a lender or your bank to get pre-approved before looking at homes. First, talking to a lender can help you understand exactly how much you can afford. There is no reason to look at home that are listed for $300,000 if you can only afford $250,000.
If you’re a first time homebuyer, talking to a lender before can be advantageous as there are many first time home buyer programs available. These programs can vary from state to state, county to county, so your lender can educate you on exactly what’s available to you. There are programs to help with the down payment as well as closing costs. It is also important to understand exactly what costs are associated with buying a home. There are many home buyers who don’t understand the difference between down payment, pre-paid items which are out of pocket costs once you get a contract accepted and escrows, which can be explained by a mortgage professional and your Realtor.
A mortgage professional can give you advice on the type of financing you should be looking to obtain and whether or not you should request the seller to contribute toward your closing costs, know as a seller’s concession.
Why should I buy, instead of rent?
A home is an investment. When you rent, you write your monthly check and that money is gone forever. But when you own your home, you can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes. This will save you a lot each year, because the interest you pay will make up most of your monthly payment for most of the years of your mortgage. You can also deduct the property taxes you pay as a homeowner. In addition, the value of your home may go up over the years. Finally, you’ll enjoy having something that’s all yours – a home where your own personal style will tell the world who you are.
Should I use a real estate agent? How do I find one?
Using a real estate agent is a very good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate agent will be well-acquainted with all the important things you’ll want to know about a neighborhood you may be considering…the quality of schools, the number of children in the area, the safety of the neighborhood, traffic volume, and more. A Realtor will help you figure the price range you can afford and search the multiple listing services for homes you’ll want to see. With immediate access to homes as soon as they’re put on the market, the Realtor can save you hours of wasted driving-around time. When it’s time to make an offer on a home, the Realtor can point out ways to structure your deal to save you money. A Realtor will explain the advantages and disadvantages of different types of mortgages, inspections, out of pocket costs, guide you through the paperwork, and be there to hold your hand and answer last-minute questions when you sign the final papers at closing. The commission payment comes from the home seller – not from the buyer.