| ||Buying a Home|
What to know before you take the plunge
Buying a home is the biggest financial challenge most people ever face. It's hard, it's stressful, and it's time consuming. And yet thousands of people stand up to this challenge every day with a mixture of hope and determination, because home ownership is a reward worth the effort.
Fortunately for prospective home buyers, this year may be one of the best opportunities to take the plunge. It is no longer a sellers' market. The red-hot numbers of the past few years have cooled a little and the inventory of homes available for sale has grown.
You also have a new ally on your side. In the last few years, the Internet has evolved into a huge and unprecedented source of information about real estate and home buying. It's now possible to do a significant amount of homework without leaving the comfort of your own bedroom. Scores of sites offer invaluable news, advice, and listings.
|You can even find specific information on housing prices across the country at new sites like Zillow and Real Estate ABC. Just type in a street address and these sites will give you an estimate of the property's value based on historical information. With home buying, there's no such thing as being too prepared.
But the most important aspect of searching for a home is getting your financial house in order. Jumping into the real estate market without knowing every detail of your finances and credit history could lead to costly headaches and missed opportunities. With a little time spent online, you can take a few big steps toward your dream of ownership.
Understand your financial situation
Whether you like it or not, mortgage lenders make judgments about you based on your credit report—how you manage your finances, outstanding debts, history of payments. They will also look at your credit score—a number that plays a significant role in the loan process and in determining the interest rate and other terms that a lender offers you.
A great place to find out where you stand is the EarthLink Credit Center, powered by Privacy Matters. You can get reports from the major credit agencies, access your credit score, and learn the basics about credit reporting.
Knowing your credit standing will help you determine how easy or difficult it may be for you to get a mortgage and also narrow your choice of lending institutions. Simply going to mortgage lenders to find out can actually hurt your credit—too many credit inquiries can lower your score.
Know your mortgage options
Once you know your credit situation, it's still not time to start your home search. The next step is to look at your mortgage options. After all, you can't bid on a house without knowing how much you can afford. And knowing how much you can afford narrows your search, helps you avoid disappointment, improves your bargaining power, and speeds the sales process.
A lot of factors go into how much you can borrow—your down payment, monthly income, accumulated debts, etc. The best way to know how much you qualify to borrow is by getting pre-approved for a mortgage. You can get pre-approved for a mortgage from qualified lenders who match your criteria at the EarthLink Loan Center, powered by Lending Tree.
Getting pre-approval makes it easier when it comes time to make an offer on a house. Scrambling to get approved AFTER finding the home of your dreams can be time-consuming and stressful.
Find a good real estate agent
Once you're pre-approved for a mortgage and know how much you can afford, you're ready to begin your search. The services of a real estate agent can be invaluable, especially for those who are new to the home buying experience. You may be tempted to search without an agent, but there are advantages and challenges that you may not have thought of. An experienced, diligent agent can help guide you through the process.
The Internet made the last two steps considerably easier. Hopefully, it can do the same for you while you search for your dream home. The EarthLink Real Estate Center provides access to an invaluable resource—HomeGain's free screening service. Users can find and compare Realtors® based on their commission rates, backgrounds, sales history, and more.
It's important to find an agent that you are comfortable with. It's also important to keep in mind whom they work for (buyer, seller, or both) so that there are no misunderstandings.
Worth the journey
Buying a home is always a challenge—whether it's your first time or your umpteenth. Confusion is inevitable. So it's important to ask questions and get comfortable with the choices you'll be faced with. Fortunately, you have at your disposal incredible online tools that can save you time and energy, and make your home buying experience a little bit easier.