Getting Started (Buyers)

Buyers:

Homeownership is the American Dream and you are about to embark on an exciting process. Mortgage rates are currently favorable and there are an increasing number of mortgage options to make the dream a reality for you. One of the main advantages of home ownership over renting is that your interest payments are tax deductible (ask your tax advisor for more detail). Further, your home will be one of your largest assets and most likely will appreciate in value over the life of your ownership.

There are a lot of decisions ahead of you. Please use this handbook as a guide to help you throughout this process.

Getting Financing:

If you plan to finance your home purchase, start the mortgage loan process well before buying a home, even before the bidding process.
-Check out loan options that best suit you. Talk to financial institutions, mortgage companies and/or savings and loan institutions to look at what kinds of loans are available, and compare rates.
-If you are a first time home buyer you may qualify for mortgage programs with little money down, low interest rates or federal programs that give beneficial rates.
-When you have settled on a type of loan and a loan institution, get pre-approved and get a pre-approval letter. To do this a loan officer will review your credit files and discuss with you how much you can borrow. This will help you know the price range you can consider when shopping.
-Having a reduced debt load and a good credit history will be helpful in getting a better loan rate. You may wish to discuss with your financial institution if there are any ways you can improve your credit score to get a better rate.
-Show your pre-approval letter to your real estate agent when you begin shopping for a home.

Selecting an Agent:

Most homebuyers enlist the services of a real estate agent or broker to help them with this complex transaction. A real estate agent is a person licensed by the state to handle real estate sales. A broker, also licensed by the state, is the person who may own a real estate company or has overall responsibility for the agent's actions.

The buyer's agent is generally paid a commission or percentage of the sale by the seller. This person can research homes in your price range and with your specific needs in mind. Agents can preview the homes for you narrowing the list for you to see. They will assist you in negotiations when you are ready to make an offer on a house. The agent will write up a contract that presents your offer and any conditions you require. The agent presents the offer to the seller or their agent and negotiates any counter offers between you and the seller.

Article provided by Old Republic.