10 Things you need to know before you buy

1) Always secure your financing first. It will make the offer you present much stronger, and you will know without a doubt what you can and cannot afford.

2) Wait to have your credit pulled until you have chosen a lender/broker. Most reputable companies can give you an estimate before your credit is pulled. Pulling your credit too many times can cause your score to drop and possibly keep you from certain loan programs.

3) Do not make any major purchases during or right before the home buying process. If you take on a large payment before you buy, it can affect how much you can qualify for. If you make a large purchase during the process, you could lose your financing all together due to a higher debt load. Keep in mind that an estimated $75.00 a month can buy an additional $10,000.00 more in real estate.

4) Have a home inspection done. Although a home inspection is a cost outside of a customer’s closing costs, it is money well spent. The inspector’s job is to thoroughly dissect the home and all of its flaws. It is up to you to decide what you are willing to accept and what you might negotiate the seller to fix, either way you know what you are buying.

5) No cost loans are not always cheaper. Although "no closing costs" loans allow you to keep more of your funds, you will most always pay a higher interest rate. The closing costs are normally paid off within the first 3 years of the loan, however, the higher interest rate will stay the same over a much longer period of time. Another option is to negotiate the seller to pay all or a portion of your closing costs instead.

6) Get your lock conformation in writing. Once you have secured a lender and a home to buy, you will need to lock in your rate. When you do, be sure to request a copy of the lock conformation in writing. This is the “proof” that your rate is truly guaranteed for the period of time you requested.

7) An appraisal is not an inspection. An appraisal is a report that states what the real value is on the property that you are buying. It includes homes that are of a similar age and square feet within a specific area of the subject. Unless there is something visibly noticeable about the home such as broken windows, water in the crawl space or missing gutters the appraiser will not know what might be wrong with the home, such as pest problems, mold, or plumbing issues.

8) Do not change your job. For the smoothest transaction possible, it is best not to change employment right before or during the home buying process, especially if you are considering becoming self-employed. The lending industry ‘s guidelines for employment are completely different for self-employed borrowers then they are for salaried folks. Most lenders require at least 2 years self –employment to obtain the very best rates and programs. If you have to change jobs and you are salaried, be sure it is in the same line of work and get an offer letter that spells out what your income is going to be.

9) Remember, the Good Faith Estimate is an Estimate. Per federal law you must receive a copy of the Good Faith Estimate within 3 days of making application. Keep in mind that it is an estimate. There are many factors that could change such as; price of the home, property taxes, homeowner’s insurance, loan program and interest rate. Until a buyer has a signed purchase and sales contract, the broker/lender cannot lock your interest rate. This means that the interest rate can change from the initial disclosure date. However, the mortgage professional you choose should counsel you and keep you posted on rates and any changes that take place.

10) Expect the unexpected. Most mortgage professionals do their very best to avoid any set backs or delays with their clients. However, due to the nature of the transaction, things do arise during this process that can create stress and even delay your transaction. Keep in mind that most issues are easily resolved with extra documentation and communication and can avoid a late closing.