Need a good reason to start looking at houses for sale in Brentwood? Well, let’s start with the fact that interest rates are sure to rise as the Federal Reserve just raised interest rates for only the second time in a decade. Beyond that, you are tired of noisy neighbors upstairs, living in your parent’s basement or perhaps you just want a piece of the American dream, whatever the reason, you want a new home.
While you dream about white picket fences, stainless steel kitchen appliances and a garden full of tasty vegetables, you need to realize this is a huge endeavor. Buying a house is both exciting and daunting, and it is one the biggest purchases you will ever make. So you don’t want to make any mistakes. To help you get through the process of buying a home, here are a few tips to get you started on your way to real estate bliss.
Check Your Credit
Your credit score is critical when qualifying for a home loan. There are several ways in which you can obtain a copy of your credit report, so that is the first step. Just because you pay your bills every month on time does not mean your credit is stellar. There are many factors that go into your credit score like the amount of credit you are using relative to your available credit.
Thoroughly go over your credit report and look for mistakes as they are not uncommon. If you find any, it might take a few months to resolve.
Set Your Budget
Next, you need to determine how much you can afford. If you want an accurate figure, talk to a lender who will break down your income and determine what you can afford.
A rule of thumb is to buy a home that costs about two and a half times your gross annual salary. Another rule of thumb is that your mortgage payment should not exceed 36 percent of your monthly gross income.
You will need to come up with enough cash to cover a down payment on your new home and closing costs. Most lenders like to see 20 percent of a home’s value as a down payment, but if you can afford more, good for you. If you are cash-strapped, there are public agencies that provide low down payment mortgages through mortgage companies and banks. In some cases, if you qualify, it is possible to get into a home with as little as 3 percent down.
Once you have the down payment covered, make sure you still have enough to cover fees and other closing costs. You will need to come up with funds to cover inspections fees, appraisal fees and more. If this is going to leave you short, you might want to consider tapping into your 401(k) or similar retirement fund.
Real Estate Agent
Most sellers list their property through a real estate agency or real estate agent. Now, these real estate agents work for the sellers, not you. So you will want a real estate agent who will help you find your dream home.
Searching for a home is not as easy as you might think, it’s a process that could take months. After all, there are several factors you must consider. For example, you want the perfect home, obviously, but you also want to be in the city you choose and in a neighborhood you like. You might find the perfect house, but it could be in a sketchy neighborhood or in a district with low-rated schools.
Make an Offer
Once you find your dream home in the perfect neighborhood with great schools, it’s time to make an offer. You will want to move quickly as there might be others who have an interest in the house. There is no foolproof system for making an offer on a home, but your real estate agent is knowledgeable about these sort of things.
Once you have reached an agreement with the seller, the seller’s agent will draw up an offer to purchase and an estimated closing date.