There are a few components that need to be thought about when looking at buying a home. These components could effect when you want to make an offer and even when you want to close on a home.
Do you have a lease agreement or a house to sell?
If you have a lease agreement it is important to check when it ends and if there is a buy out clause. Otherwise you could get stuck with an additional payment that you had not counted on. The mortgage company could count this payment against you if you bought a home while still on a lease. Blowing it off would not be a good idea either as it could end up as a collection account against you which would affect your credit and potentially the ability to obtain further credit.
When should I get pre-approved?
There really is no right answer for this but to keep it simple...do it when you decide you want to buy a new home. This way you can sit with the loan officer and see what the constraints may or may not be. You might even be able to formulate a few different options for buying. If for some reason it is determined that now is not the time, a game plan can be designed so you can plan for it in the future.
When should I start looking?
Most agents would suggest that you be pre-approved before you start to look. This way you are looking for homes that are in your range. As for when to look, I personally would start looking about 120 days before I wanted to close and move in on a property.
When do I make an offer?
Once you find that house that you want, you and your agent will sit down and focus in on making an offer on the home. The offer will be made on your constraints and of course the price, condition and listing time of the home. Many think to low ball a home. While this periodically cal work it is not the best advice to try and take with you. With home prices as low as they are right now the amount of time a house has been on the market will be a major factor on what you and your agent will determine to offer for the home. If there are multiple offers being presented your agent may suggest a few things differently then if you were the only offer. Being pre-approved will give you an advantage. be aware that how quickly you can close or if you are asking for seller concessions can play a factor on an offer being accepted. Be aware though that seller concessions are very common at the present time.
What is Prequalification?
Prequalification is simply a rough estimate of how much home you can afford.
What is Pre-Approval?
A pre-approval involves a formal application process and provides you with a formal commitment and ease of mind on how much home you can afford and what interest rate. A pre-approval can in many circumstances take a matter of minutes. The more complex the file, the more time it might take
So many different pieces to this entire puzzle that it will take a while to get it all out there....plus I get questions sent to me and ideas for topics that I need to hit along the way. Make sure to follow or like via google or facebook so you get up to date info.
Big news today is the FOMC meeting as they announced today that they see some signs of an improving economy but will continue with the present plan that they have in plan for stimulating the economy. They are prepared to change and adjust accordingly as they see signs that deem that they need to.
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