Lately, I've been asking young people what they want to know about real estate. Many inexperienced buyers reply with a fundamental answer: How do we buy a home?
I tell them the first stage should always be to apply for a mortgage.
Yes, before any home is selected, the buyer must know how much of a mortgage he or she can afford. Knowing your credit score is very important. You, as a buyer, may otherwise qualify for a large mortgage but cannot secure one with nice low payments because of late payments on some of your credit cards and other bills.
When you apply for a mortgage, you will learn your credit score. A good, local loan officer will assist you in ways to address "fixable" issues. After buyers qualify for a mortgage, they can begin to look for homes that match their proposed payments.
Find an agent who you know is respectable, knowledgeable and honest. Sit with this agent and show the agent your letter of qualification from the lender. You are not bound to this lender nor are you bound to this agent. You may want to meet with several loan officers and several agents to determine who fits with your personality and your needs.
When you find an agent, secure a list of homes that meet your needs in location, price and floor plan. A good agent can research the status of houses that interest you. That is, information on what the seller paid for the house and when the property was purchased. This information will come in handy when you begin negotiations. Knowing the motivation of the seller is very important, in addition to knowing how this property has been maintained over the years.
Important points to understand when purchasing are the following:
--- Understand the total payment. Principal and interest are determined by the lender. In addition, buyers need to secure insurance on the property and you, the buyer, can shop rates to determine the best price and coverage. Your real estate agent can assist with this but the ultimate responsibility is on the buyer.
--- Taxes will change in the next year after the buyer's closing date. Buyers inherit the seller's taxes until Dec. 31. The following Jan. 1, a new tax rate will affect the property, but the actual tax bill will not be known until Nov. 1. Buyers can find estimated taxes through the Brevard County Appraisers Web site.
Homeownership is the American dream. In spite of all the problems in our economy today, owning a piece of America is still very possible.
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