The homebuying process March 28, 2019
Thinking about buying a home? Here are some things to keep in mind during the homebuying process:
- Get prequalified. This way, you’ll know that you’re qualified for a mortgage – and for how much – and can show agents and sellers the letter stating that you’re prequalified. A prequalification typically is valid for about 90 days, so it’s best to wait until you’re truly ready to start looking for a home before taking this step.
- Know your mortgage types. Fixed-Rate Mortgages typically are offered in 10- to 30-year terms, and the interest rate will not change during the life of the loan. Adjustable-Rate Mortgages usually carry a shorter term and lower interest rate, but the interest rate is only fixed for a certain period of time.
- Have your money ready. It’s ideal to have at least 20% of the home price available as your down payment to avoid the added expense of private mortgage insurance (PMI). Other costs to consider are closing costs – which depend on the home type, mortgage type and location – and your first full year of homeowners insurance, which needs to be paid in full prior to closing on your home.
- Be ready to act. Once your offer is accepted, apply for your mortgage right away to ensure that you’ll be able to close on time. You’ll also likely want to schedule a home inspection to help identify any existing or potential problems with the home’s structure or systems.