If you are thinking about buying a house, it’s important to be prepared before you start searching. Know your credit score, obtain a preapproval letter from your mortgage lender, and decide which home features you are and are not willing to compromise on.
Deidre Davis, MSUFCU Chief Marketing Officer, will share a few things to consider before you start searching for your dream home.
What are some home-buying expenses you should save for?
The first expense you should save for is a down payment — a percentage of the purchase price most lenders require that also will reduce the amount you need to borrow.
Also be sure to factor in property, school, and other taxes as your budget because these will be part of your monthly mortgage payment.
There are also extra costs for inspections and your current living arrangements if you need to sell a house or end an apartment lease. And, don’t forget to consider moving costs.
How important is a preapproval and a home inspection?
Very. A preapproval letter from your lender indicates the amount and type of mortgage you qualify for, based partly on your credit score. It demonstrates you are a serious buyer who can finance a home purchase, giving you negotiating power in a competitive market.
A home inspection will find small items to be fixed or larger issues that could become deal breakers. Work with your real estate agent to determine what is realistic to ask the seller to repair. When there is a safety or structural issue, it’s absolutely vital to negotiate with the seller to make the repairs or you walk away.
What should you look for in a real estate agent and lender?
A good real estate agent and the lender will want you to be equipped, informed, and comfortable, so ask all the questions you have. You’re paying for your agent’s expertise and your lender will determine the terms of your mortgage, so understanding the home buying process and the terms and features of your mortgage loan, is one of the smartest things you can do for yourself.
Should you compromise on your “must-have” list?
Don’t be surprised if you end up changing your mind about what you want as you house hunt. Some of your “must haves” may turn out to be more expensive than you thought, while others might not be available in the houses that are on the market. Be prepared to reprioritize nonnegotiable items or wait until you can afford or find what you want.
You should also keep in mind that much can be changed or fixed to meet your specific preferences. This includes smaller items such as paint colors, light fixtures, carpeting, landscaping, and other cosmetic changes.
How can MSUFCU help?
MSUFCU offers a wide range of mortgage products, from a First Time Home Buyer program to conventional and adjustable-rate mortgages. The Credit Union also offers home improvement loans and home equity lines for those interested in renovating or remodeling.
In addition, MSUFCU offers mortgages in 12 states including Michigan, Arizona, Colorado, Florida, Georgia, Illinois, Indiana, North Carolina, Ohio, Pennsylvania, Virginia, and Washington.
Members can apply for a mortgage preapproval through the MSUFCU Mobile app, msufcu.org, or at any of our branches.
This segment is sponsored by MSU FCU.
