||Make A Wish
List and A "Must-Have" List
Before you begin looking for a home, take time to decide what you
need versus what you want. If you're dreaming of a gourmet kitchen
or a swimming pool, put them on your wish list. But be practical
and develop a separate list of what you must have in a home to be
comfortable, such as: number of bedrooms and their size, garage,
size of the yard, appliances, fireplace, air-conditioning, laundry
room and storage space.
In addition to details about the home you want, write down how close
to work you'd like to be, how near you would like schools, shopping
and recreation to be, as well as the safety of the location you'd
like to live. Do you need to live in an expensive gated community like Morgan Creek or can you live in a less expensive neighborhood in Roseville. The more specific you are about what you want in home,
the easier it will be to focus your home search on homes that have
the features you want.
||Find Out How
Much Home You Can Afford
House hunting is faster and easier when you know what price home
your budget can handle. Most lenders follow what is called the "28/36"
guideline. In general, lenders want no more than 28 percent of your
gross (before taxes) monthly income spent on your mortgage, home
insurance and property taxes. In addition, your lender would prefer
your total debt (both mortgage and consumer debt, such as car loans
or credit card payments) to be no more than 36 percent of your gross
monthly income. People with good credit histories may be allowed
to go over these limits. To find out the price range of homes you
can afford, use the Calculators
Whether you look for a home on your own or use a real estate agent,
keep these important tips in mind as you look for your next home:
Keep your "Must-Have" list with you to make sure a home
that interests you has the features you most want.
Stay focused on what you like about the house, rather than its furnishings.
Remember that the owners will take that beautiful painting and antique
armoire with them when they move.
Find out everything that is included in the sales price. Many owners
include appliances, light fixtures and window treatments along with
the house at no extra cost.
Write down details about each home you visit. Take photos inside
and outside each home and staple them to the detail sheet, along
with the property's address, to jog your memory about the homes
you've seen. Most agents recommend that you limit your list to your
top four choices -- so cross out and add homes to your list as you
visit new homes. This will help you make your final decision and
help you choose a home that has the features you most want.
Remember that the sales agent works for the seller -- not for you.
Even if a sales agent treats you like a long time friend, keep the
top price you're willing to pay for a home a secret. As far as the
sales agent (and the seller) should know, the price you offer for
a home is the most you will pay.
When you make a written offer on a home, include the reasons you
will be allowed to back out of your contract. These reasons, called
"contingencies," protect you if your attorney finds legal
issues with the property, if you're unable to get the loan you need
or if your home inspector finds serious damage or problems.
Find the Right Home Loan and Apply
With so many choices available, you should be able to find one
or more home loans with the options that are right for you. Our
Which Home Loan Is Best For Me? section can help you learn about
different types of home loans and options, so you can decide which
home loan is best for you. Before you apply, review our helpful
How To Get and Keep Good Credit section to learn how your credit
rating affects your home loan decision and what you can do to
improve your credit.
When you're ready to apply, your lender will need proof of the
information you give. Helpful documents to have on hand include
your most recent paycheck stub, a copy of your current bank statement
and information about other accounts and debts, such as stocks,
your 401(k) program and the balance on your credit cards. Find
out exactly what's needed in our How To Prepare Your Loan Paperwork
To protect the interest rate you were quoted when you applied for
your home loan, you may choose to lock your interest rate for a
set amount of time -- usually 30 or 60 days. You will need to close
on your mortgage (sign the final papers, provide any closing fees,
etc.) before this time limit is over to protect your interest rate.
After you complete a final inspection of the home, you'll attend
the loan closing, which is where you'll sign any legal/home loan
papers and pay any closing fees. With your final signature, you'll
be given the keys to your new home!