Colorado’s Premier Real Estate

Buying your first home doesn’t have to be frightening. A little preparation and research will make the home buying process smooth and painless. Follow these six steps to ensure your home purchase fits your needs and budget.

💯 Know Your Credit Score

Before you start house hunting, take some time to look up your credit score. This score is a calculation of your credit worthiness. Lenders will use the 3-digit score to decide if you will be able to pay them back. A high credit score proves that you know how to honor credit obligations. Lenders are more comfortable giving loans to shoppers with high credit scores, and will often offer discounted interest rates to more secure applicants. If your score is lower than 680, spend some time beefing up your credit score to qualify for better loans. Pay off old debts or check your credit report for errors or invalid items.

💰 The Importance of Saving Money

While you’re working on your credit score, dedicate yourself to putting money aside for the down payment and closing costs. Experts suggest loan seekers put aside 20% of the value of their dream home for the down payment. If you’re looking for properties that cost about $100,000, you will need $20,000 for the down payment. Some loans like those from the Federal Housing Authority (FHA) can be obtained with a smaller upfront commitment. However, to qualify for the best loans and interest rates, try to contribute as much as possible to your down payment fund.

🙋‍♀️ Find the Right Real Estate Agent

Once you’re satisfied with your cash reserves, find a licensed real estate agent. A real estate agent will guide you through the home selection process. They save you time and money. Instead of spending hours driving around different neighborhoods and searching online listings, you can rely on your real estate agent to locate properties that fit your specifications. They are able to access official records and historical documents that can help you avoid properties that have big, expensive problems. Agents also ensure that all required paperwork is completed accurately so you don’t have to stress.

✍️ Get Pre-Approved for a Home Mortgage Loan

Before you and your agent start selecting potential properties, get pre-approved for a loan from your lender. A pre-approved loan lets you know how much the bank is willing to lend towards your home purchase. This is a huge advantage for new or inexperienced home buyers. Knowing how much you can afford upfront save time and frustration. You won’t waste energy researching homes outside of your price range. It also means you’ll be ready to move faster once you find a home you do like. If you have to bid on your property, sellers are more willing to accept bids from buyers with pre-approved loans.

💵 Placing the Right Offer

Once you find the perfect property, place your offer. What is the right amount to offer a seller? The easiest strategy is to match the seller’s asking price. If the property seems popular, you may want to raise your bid. There is no rule on how much to bid. Just be careful not to offer more than you can actually afford.  For properties that seem less popular or that need serious work, try offering slightly less than the asking price. Motivated sellers will often accept a lower bid to unload less-than-perfect properties. Keep in mind, however, whatever you save in purchasing costs has to justify the price of repairs.

📝 What Happens After Offer is Accepted?

When the seller accepts your offer, there are a few more steps before the sale is finalized and you’re ready to move in. Your lender will send an appraiser to inspect your new property. They will provide an estimated value. The bank will use this value to determine the final amount of your loan. Please note that banks will not finance a loan that is larger than the value of the property. Hire an inspector to assess the home’s condition. They will search for hidden plumbing, electrical, and structural problems. If any are found, you can pull out of the sale or renegotiate the price.
Once the paperwork is signed, call your insurance company and purchase a homeowner’s policy. Many lenders require borrowers to carry certain types of coverage. Check the details of your loan.

Owning your own home gives you stability and the opportunity to pass your wealth on to the next generation. These tips help you make the best decisions through your buying process.

Your real estate agent is the best source of information about the local community and real estate topics. Give The Ingram Group a call today at 720-644-9164 to learn more about local areas, discuss selling a house, or tour available homes for sale.

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