Thinking about buying your first home? It’s an exciting and maybe even daunting challenge. The process can be extremely bumpy and scary if you don’t take care of these 3 things FIRST!
Financial Health: With all the ads about checking your credit score or knowing your credit score, many people think that is the only thing to consider when buying a home. It is an important piece of the puzzle but certainly not the only one. You could have an excellent credit score and history but your debt to income ratio maybe outside of lender limits. Too much overall debt can flag you as a risk for default. How many people do you know that are “payment broke”? Their monthly obligations leave little room for financial hiccups. Student debt is one reason why some people can’t qualify for a mortgage even though they have a high credit score and a stable employment. Working with a mortgage professional or financial counselor can help you to figure where you are in terms of qualifying and what if anything can or should be done to get you on track. Quite often a person can make some adjustments to certain types of debt that have more of an impact on their ability to qualify for a home mortgage. The best mortgage lenders I know have resources to help you get your financial health in order. The medicine to reach financial health may be less distasteful than you imagine and the time for recovery may be relatively short. The bottom line is that You don’t know, what you don’t know. Take away some of the stress in your life and get the facts from professionals who deal with this for a living.
Your Lender: Many people think the most important step is to find the right home. The fact is finding an excellent mortgage broker is the first and most important step. Having someone who understands all the different mortgage products available and which one will help you meet your goals is critical. Remember, you may have that mortgage (and relationship) with all it’s terms, quirks and conditions for as long as you own that home. A true mortgage professional will ask you probing questions that will help them access how much home you can afford and what you amount will qualify for. (Getting prequalified online by a “dot.com” lender isn’t going to make it in the real world of real estate)There are several different types of mortgages and the types of properties they will allow you to buy changes. You will need your mortgage company to provide you with a pre-qualification letter stating that you are capable of buying the home you interested in. Most Sellers WILL NOT consider offers that are not accompanied by a letter from a reputable lender.
Your Agent: You are about to make one of the largest purchases of your life you should consider having someone representing you in the transaction. Agents, like Lenders, are not the same. Finding an Agent that will listen to your needs and understand your circumstances is critical. A true professional won’t show you every house in the area, they will show you the homes that best meet your stated criteria. Seasoned Agents will spend time with you to get the right search in place, find you a home that fits your needs and ability to purchase and show you those homes. Your agents true value is not just as “house hunter” but also as negotiator and coordinator. There are over 100 steps to a real estate transaction that need to happen in a certain order. The Buyers agent is often receives compensation from the Listing Agent under terms of a Broker Cooperation Agreement. You and your Agent need to establish how much compensation they will receive from You and if that amount will be reduced (or eliminated) if there is compensation from the Seller. For those that think it is better to buy directly from the Listing Agent remember that they are contracted with the Seller as the Sellers Agent and represent them (the Seller) in the transaction. They have no obligation to represent your interest in any way and would be in violation of their responsibility to the Seller if they did so. As with so many things in this world, you get what you pay for!!
As the saying goes, “Every journey begins with the first step” and in the case of home ownership taking these 3 steps should make your journey more enjoyable and provide a much better outcome.
Agency License Information: Voyageur Real Estate Group, LLC is licensed in Minnesota
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