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Girl’s Guide to Buying a House – Preparing for the Purchase

This article is sponsored by Peggy Magnanelli.

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There are few things more exciting than buying a house. It doesn’t matter if you are a first-time buyer or someone relocating for retirement. Each year there are different things to consider about making a real estate purchase. Understanding the market and your ability to be a qualified applicant for a mortgage is extremely important.

According to the National Association of Realtors there were 5+M existing houses sold in 2017. The U.S. Census reported that there were 612,000 newly constructed residences sold last year, as well. You may be considering a particular type of home or a certain region of the country. Preparing yourself to make this sort of large purchase does require learning about the process and building your financial strength.

buying a house
photo courtesy of Peggy Magnanelli

Mystery to Home Buying

Many people feel that there is a particular mystery associated with buying a house. This is generally because not everyone knows what is required to get a mortgage loan. There’s an easy way to educate yourself, though. Realtors and loan officers often teach free classes to those interested in buying residential properties. These classes focus on the steps that lead up to a successful closing.

The more potential buyers know about the qualification process, the better off they will be. Gaining this information allows for buying a house that is not only a good fit for your season of life, but is also within your budget.

State and Regional Factors

You may be thinking about purchasing real estate outside of your current state or region. Those cost of similarly sized homes in different locations can be quite different. Simply going from the Washington, DC area to upstate Maryland will show a significant sale price. This could mean the difference between half a $M depending on where you settle.

Most families will need to consider down-payments, interest rates and a pool of lenders. In the middle of September last year, the NY Times reported that 30-year mortgages on average were getting a 3.78% interest rate. Today, interest rates have gone up (they are currently in the low 5’s for conventional loans) and so have housing prices.  Rates are based upon your creditworthiness and debt-to-income ratio and other factors like making all your payments on time.These factors and others will be considered by banks to help determine the approval of your loan.

Preparing to Purchase

The best case scenario for purchasing your first house is to prepare financially years or months in advance. There are many times, however, when an unexpected move is necessary. The Balance offers information to consider prior to even applying for a mortgage. The knowledge that you gain will likely affect the type of house you’re able to buy. All of this is essential when your time is limited for a move.

One important thing is the length of mortgage that is best for you. Although 30-year loans are common, it is possible to get a mortgage for a shorter term. The 2008 housing crash changed real estate purchasing. The Dodd-Frank Act made lending requirements tighten in order to protect buyers. This also made way for beneficial products, such as Portfolio Loans for some mortgage applicants.

Survey the Area

A good realtor can be instrumental to your home purchase. These are professionals who are familiar with cities, towns and surrounding areas. Their use of internet resources will help you to narrow your list for available properties and new subdivisions. One way to find someone to assist you during this process is to read reviews from sites like Zillow. Here is where buyers share their experience with agencies.

You should search for a realtor with experience in the industry and proficient with the purchasing procedures. These are typically licensed individuals who also have specific designations, such as ABR, CRS, and MRP. Once you’ve chosen your real estate agency, you will be able to view properties online and schedule viewings. Surveying the area for schools, shopping and work opportunities is important.

buying a house

Meet Family Needs

Standard new construction houses across the country have at least 3-bedrooms and 2 baths. The square footage of these may range from 2,500+ to 3,000+ square feet. This may be an adequate size house for some families but too small for others. Considering what is necessary to meet your family’s needs is important. Remember that this is a long-term investment and must be the best that your budget allows.

Calculating fees, taxes, as well as, HOA costs is essential to this process. These will not only play a role in your monthly mortgage payments. They also determine what your final closing costs may be, as well. When all is said and done, buyers with government benefits for closing end up paying less out-of-pocket. Working with real estate experts is the best way to truly prepare for this purchase.

Applying For a Mortgage

There are a number of practical things that homebuyers should think about before applying for a mortgage. Having a good credit score is extremely important. This can only be obtained by those who have a history of paying debt on time. Those with a consistent income history are typically deemed better applicants for these loans.

This process is all about creating a pattern of worthy activity as a consumer. Many buyers will get a pre-qualification status from their lender prior to searching for houses. This is a good way to show a realtor that you are serious about this purchase. It also enhances the shopping experience because you are certain what the best price range is for a potential property.

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 Peggy Magnanelli is a Full-Time, Re/Max Results, Licensed Realtor, CRS, CDPE, MRP, ABR, and SRS. She is also the President of Women’s Council of Realtors and Instructor for the Community Action Agency of Frederick County, Maryland. She utilizes her 15+ years of expertise in this industry to advise and assist buyers with their property purchases.

Comment (1)

  1. KT says:

    Great information! Thank you Peggy Magnanelli for providing this very helpful timely reminder of all the due diligence the home purchaser must embrace in pursuing one of their largest in life economic endeavors! An essential primary key to their success is making a committed connection with a tenured expert Realtor who has in-depth broad-based familiarity with the local real estate market arena such as you do!

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