February 15, 2019
Are you buying a home for the first time? Ever?
Well, then you’ve come to the right place because I’m going to give you 8 strategies to follow.
Hi everybody my name is Ty Eden. I’m with Exit Realty Redefined, here in Wheaton Illinois. I’ve been a Realtor for about a year and half and I’ve been an investor for virtually my whole life. I work with Buyers, Sellers and Investors. I’m sharing with you 8 tactics to follow or 8 strategies to follow in this video series.
Now, I’m not going to cover all 8 in this one segment. I’m going to cover 2 and then I’ll have 3 more additional videos after this. So, keep an eye out. Watch this video to the end in order to get all the stuffs you want to get.
In our previous segment we talked about: pulling your credit, dealing with credit issues, what your credit score breakdown really is comprised of, negative credit reporting and what you really should do about it.
Now in this segment we are going to talk a little bit of: Getting pre-approved, Shopping for lenders, beefing up your down payment, reviewing your budget and saving up some money.
Getting pre-approved is the most important aspect. well one of many important aspects of going thru the process of buying your first home. The reason why is when you’re out shopping, you’re looking at homes, you may end up stumbling across that actual home you really want. So, you’re going to instruct your agent to submit an offer. Well, what makes your offer stands head and shoulders above others is going to be a few “attached” such as a pre-approval letter from a lender. What that means is, the lenders are already pretty much running an application. You submitted financial information to them.
They have pulled your credit report and you are pre-approved. Where in other examples, if you’ve been pre-qualified, that just means that they have taken a look of what you’ve stated as they used to and the years passed. “Here is what I make”, “Here are what my expenses are” and the lender does no checking of any kind. Then they just pre-qualified you and you don’t have a strong leg to stand on and nothing you can attach to your offer to the seller on that ideal home that you want to actually buy.
Shopping lenders: So, you want to make sure that you’re dealing with a lender that you’re comfortable with. Someone you can communicate with and that you understand on what the terms and conditions are of that loan you’re applying for.
Why that’s important is, the letter that you get for your pre-approval is so important with your offer. You want to make sure that you’re dealing hopefully with an actual lender. Now that is someone that’s actually writing the check and that you’ll be making your payments to for the life of the loan or for as long as you live in that home. There are those folks out there that are mortgage brokers who are going to package the loan, go thru a lot of the upfront checking of credit, looking at financial information and so forth and they simply hand the application of to the lender that will write the check to the escrow company when you’re sitting at closing at the time you find that actual home.
The difference is, there might be some miscommunication from the mortgage broker and the lender as the time period lapses. Once your approved for a loan, it doesn’t mean that they are actually writing a check and putting it in escrow. You actually have to have a contract that you have to bring back to the lender and show “hey we got an accepted offer, we are ready to buy the house”.
When you do find that lender, make sure you understand all the terms of the deal. The fees, the interest rates, any kind of point that there are, the different loan programs that they have available as well. That is a very important aspect depending on how much you have got to put down on the actual loan itself. Do they have a low interest? do they have low down payments? Do they have FHA? For those veterans of you out there, do they do VA loans where there is no down payment required at all.
Make sure that you know all those terms before you actually commit to a specific lender.
Now our next and final point in this video segment is:
Beefing up your down payment: You want to make sure that you’ve got a sizeable enough down payment to put down on the loan and the reason why that is important is because it’s just like a car. The more of your own money that you put towards what your purchasing, the less your loan is, the less principal you get charge interest on and the cheaper the purchase is over the life of the loan. This is if you’re going to live there for the entire life of the loan.
You want to be careful not to put to much down payment on the house. Because you also want to have some cash on the side for once you move in for any after closing repairs or any deferred maintenance. What deferred maintenance means is like “Is there a window that’s broken and it needs to get replaced?” “did a pipe burst unexpectedly and the insurance isn’t paying for it?” “Did the toilet all of sudden leaking and that wasn’t discovered in the home inspection before you close on the property?”.
All those expenses are going to continue to go because a house will depreciate just like a car. Certain things are going to break down and those are expenses that are going to come out of your pocket. So, make sure you’ve got enough money for the down payment and you’ve got some cash set aside to be able to pay for any kind of unexpected repairs.
Some of those repairs might be covered under insurance but there is a deductible.
So that’s what I’ve got for you in this segment. Thank you very much for checking out my channel and we will continue this series in our next video. So if you are buying your first house ever, please stay tune for the next video coming out and there will be one more after that!
Ty Eden - Exit Realty Redefined