Home ownership is quite an achievement. The financial benefits to owning a home are strong; and in order to get into your first or perhaps remodel the one you’re currently living in, you will most likely seek financing from a lender.
Preparing for Home Ownership Financially
If you are confident of your ability to qualify for a loan, preparing the appropriate information for a lender should be little trouble. If you have somewhat of a checkered financial background however, your journey could be a little more stressful. Either way, it is learning process to seek approval for a loan for your home, and you will get your finances in order over this period of time.
You can start by ordering your credit report. Look it over carefully to rule out any errors. Credit reporting errors happen more frequently than you might think, and now is your opportunity to contact the appropriate people and places to clean up your credit report.
If all of the information on your credit report is error-free but not particularly favorable, you can also make some phone calls and contacts to remove old instances or maybe minor instances that are hurting your credit score. All in all, your goal is to get your credit score number as high as possible. So, if there are pathways that you can take to influence your score positively that seem tiresome, do not grow weary! Press in–as your time will be well spent if you are able to raise your score.
Once you have tended to your own financial health and records, you can start considering the financing options that are available to you. When it is a buyer’s market, you have a little more to work with than when sellers have the upper hand. So, don’t be afraid to bargain a little, and remain open to several possibilities. Ask your Realtor to keep his/her eye out for “spec homes.” Sometimes, especially in weak economic times, builders put houses up and then wait for a buyer.
If too much time passes, the builders can become uncomfortable with that spec home just sitting there; thus, they may settle for a lower price than they once had hoped for in order to rid themselves of the burden. If the spec home is built in a neighborhood that is just trying to get established, you may be able to get a great deal, really. The builder may want to settle with you quietly and quickly to facilitate the neighborhood’s growth.
Spec homes are great for buyers who want a new home but do not want to go through all of the decision making involved in working directly with a builder as the home goes up. If, however, you are excited about the building process, press on to find a builder and the financing that you need. A builder can also be your lender; however, do not agree that his deal is the best until you have truly looked around.
Your goal is to find a loan for the least possible interest rate available. Over the time that you live in that home, you will most assuredly pay your lender more money interest than the actual cost of the home. So, the interest rate for which you settle matters a great deal. Other deals might be available to offset interest rates, such as shaved points at closing time, waived closing fees, a percentage of the final selling price returned to you in cash at closing, and more. Just keep in mind that the interest rate almost always matters the most.
The builder may want you to stay with his financer for all kinds of business reasons and try to offer you “deals” such a fireplace in the bedroom, or extra detailing in the woodwork; all of that is nice, but keep your eye on the bottom line.
Article written by Kimberley Joy Kelly a Palm Springs California Realtor who specializes in La Quinta Short Sales sellers avoid foreclosure. You can learn more about Kim by reading her La Quinta news blog.
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