Whether you’re a first-time home buyer or you’ve bought and sold property a multitude of times over the years, the real estate industry is endlessly changing. Things are moving on a day to day, hour by hour basis – meaning that when it comes to purchasing a home you need to have your foot in the door before you even schedule a time to walk through the home. Being prepared has never been more important when it comes to Northeast Georgia’s real estate market.
Things to do before going to look at your potential dream house
- Talk with a lender and get your pre-approval letter – this helps show sellers that you’re backed by a bank and serious about buying a home.
- Find a local realtor – while you may have that one aunt that does real estate on the side and only lives a couple of hours away, a local real estate agent is going to have the insight you need on the market for the city you’re home hunting in
- Start saving – while some loans don’t require a down payment, yours might. Depending on your loan and the bank you’re working with, you may need to put down anywhere from 3.5 to 20% of the purchase price (sometimes more) when you go to buy a house.
Understanding Loan Types
It can be confusing to know which type of loan is best for your home buying needs. There are so many tiny details that can be easily overlooked and more often than not will leave you feeling overwhelmed trying to read through the lengthy list of standards. When it comes to choosing a loan, your lender of choice can help make the process easy to understand.
Depending on the type of loan you apply for, your house buying options will vary. Let’s break down the most common types of loans in the home buying industry and some of their differences.
Conventional Loan – If you’re looking for flexibility and have been putting money away in your savings for a while, then a conventional loan may be right for you. This type of mortgage loan is not backed by a government agency, rather it’s guaranteed through private lenders.
FHA Loan – Backed by the Federal Housing Administration, FHA mortgage loans are available with low down payment options. They’re slightly more lenient than other types of loans and help protect your lender against loss if you default on the loan. FHA loans typically require 3.5% of the purchase price as a down payment.
VA Loan – Provided by private lenders such as banks and mortgage companies, VA loans help Veterans, eligible surviving spouses, and servicemembers to become homeowners. The Veteran’s Affairs (VA) guarantees a portion of the loan so that private lenders will provide better terms for a home loan.
Benefits of a VA loan include no down payment or need for Private Mortgage Insurance (PMI), low interest rates, and even property tax reductions which vary by state.
What if I’m a Cash Buyer?
Even cash buyers need representation. There are so many tiny details that go into real estate contracts to help protect both the buyer and seller. Which, in the long run, is why you want to work with an industry expert to avoid potential catastrophes throughout the duration of your contract. REALTORS® handle the paperwork and can help streamline the workflow when it comes to communicating with inspectors, appraisers, and more.
Why A Pre-Approval Letter is a must have & Impresses Sellers
There are several reasons a real estate agent will ask you if you’ve gotten a pre-approval letter before scheduling an appointment to show you a house. It’s not to try and get your bank account information or to judge what your income is, but it is to ensure that your homebuying experience is beneficial.
Here are just a few of the many reasons your agent will ask you to get a letter:
- To prove that you’re who you say you are. The phrase stranger danger is a real threat in some situations. While most people aren’t out to harm each other, there are people that pose as home buyers and will target agents and become violent. A pre-approval letter helps verify that you’re truly in the process of potentially purchasing a home.
- We value your time. Just as much as you want to buy your dream house, we want to know what price range your lender has approved you for so that we don’t waste your time looking at houses that are well below your budget or well over what you can afford. This helps us show you homes in your price range and saves everyone time.
- Stand out to home sellers with some credibility. A pre-approval letter helps show sellers that you’re a serious buyer and not just another curious passerby. Should you choose to make an offer on a property, your agent can attach your pre-approval letter to it which can make your offer seem more prepared and acceptable than others on the table.
Are you ready to start looking for your dream home? Do you need help finding a lender to help make your purchasing process a smooth and seamless experience? Call me today! I work with multiple lenders in our area and can help get you in touch as well as schedule an appointment to view that gorgeous home that’s caught your eye.