With the housing market recovery underway and interest rates low but on the rise, experts say now is a good time to buy a home.
While searching for a home can be exciting, it’s one step in the process. Determining your budget and assembling a team of specialists to help navigate the process can be just as important.
Discover Home Loans is offering tips to help make starting the search for your home as easy as possible.
Lay a Financial Foundation
Prior to searching for a home, it’s important to get a handle on your finances. Obtain a copy of your credit report and identify items that may affect your score and repair them.
Put together a framework to save money for a down payment, which can range from 3.5 percent to 20 percent of the total purchase price of the home depending on the lender and type of loan you choose. Establish a budget and contribute to a high-yield savings account regularly. For convenience purposes, consider making automatic deposits.
Secure a Mortgage Banker
The next step is finding a mortgage banker you can rely on and have a rapport with. Look for one who will educate you about the loan process and help you make choices that best fit your financial situation. Other important differentiating factors are choosing a mortgage banker who specializes in purchase loans and provides fully underwritten pre-approvals. It’s also important that your mortgage banker and realtor work as a team to determine the best loan solution for you.
Identify a Budget Range
Once you’ve found a mortgage banker, work with them to identify how much you can spend on your home. The best way to do that is to get preapproved for a loan. A preapproval means you qualify for a particular loan amount based on your verified income and credit information.
“You may have heard stories about people who find the perfect house and then can’t secure the financing. There’s no reason to leave this as an open question,” says TJ Freeborn, Mortgage Professional at Discover Financial Services.
Getting a fully underwritten preapproval from your mortgage banker will give you confidence during the home shopping process. Plus, having a preapproval helps the seller take your offer seriously.
Find a Realtor
Finally, find a realtor who specializes in your area. Ask friends and family for recommendations, or look for suggestions from a reputable business. For example, Discover Home Loans has partnered with one of the largest real estate networks and can match you with a reputable agent.
“Your realtor should be a resource who can help you identify what’s important in a house and community and find potential properties to look at,” says Freeborn.
Once you’ve found the home you’re interested in buying, notify your mortgage banker to finish the financing process.
Many tips and home buying resources are available on-line at www.DiscoverHomeLoans.com.