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Before Buying a Home, Consider This...
Over the past few years it has been easier than it ever was before to become a first time homeowner. While things are changing somewhat in this arena, with interest rates rising slightly and predicted to continue this upward trend slowly but steadily over the coming months and year, at this time mortgage requirements continue to be quite realistic and most lenders require only a small down payment. But before you start looking for your dream house:
- Attend a free homebuyer workshop in your community. For information on new home buyers classes in your area, call the Consumer Credit Counseling Service toll-free at 1 (800) 388-2227 or Fannie Mae’s HomePath hotline toll-free at 1 (800) 732-6643.
- Know what your credit history looks like.
- Have a realistic budget in place so you feel confident about how much you can afford.
- Decide as a family what type of house will work for you.
- Find qualified, reliable professionals you can work with.
- Be aware that all costs involved in buying a home are negotiable.
Research, Research, Research Mortgage Lenders
In the past, it may have taken prospective home buyers weeks to research mortgage lenders and rates. Or, they may have simply taken the advice of their real estate agent and gone with the lender he or she recommended.
Now, you have a number of options. There are a variety of services that collect and publish mortgage rates for free or a small fee. The Internet is a great resource where you can check out rates, as well as lenders that offer online mortgage transactions. It’s important to comparison shop and become familiar with different offers so you can select the best mortgage package for your financial needs.
Getting the Fairest Appraisal of Your Home’s Value
Whether you need an appraisal to qualify for a mortgage or to refinance your home, as a home owner, buyer, or seller, you want the highest appraised value possible. Mortgage lenders, on the other hand, want conservative appraisals so they can reduce the risk of granting loans to unqualified home buyers. Many appraisers view 5 to 10 homes a day, and may need help remembering the details about your home. How do you make sure you get the fairest appraisal possible?
- You or your real estate agent should meet the appraiser at your home, and ask to see the appraiser’s license. Licensed appraisers are usually better trained and have more experience than unlicensed ones, who may be poorly trained and unable to fairly evaluate your home. If your appraisal is lower than you expected, you can request an appraisal review.
- Supply the appraiser with recent home sales in your neighborhood. Most appraisers rely on the comparable sales approach. They base the value of your home on the value of similar homes in your neighborhood that have recently sold. If you can provide the appraiser with the addresses and sales prices of recently sold homes, it can help you get a more accurate appraisal.
- Provide the appraiser with your home’s estimated value and a detailed list of special features that may affect its value. You should include information such as square footage, lot size, number of stories, etc., as well as any special features that may affect your home’s value, like a view, a pool or spa, etc.
- Request that your mortgage lender provide you with a copy of your appraisal quickly and at no additional charge. If you think your appraisal is too low, contact your lender immediately and request an appraisal review or that a second appraisal be conducted.
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