House hunting can be one of the most exciting times in your life, but it can also be one of the most challenging. Before you start your search, it’s important to ask yourself some questions such as: What type of house do I want? Where do I want to move to? What is my maximum budget? How do I start the process?
The experts at Pacor Mortgage have some tips to help you find the right home at a price you can afford.
Determine Your Budget.
The very first thing you should do – even before you start looking at homes – is figuring out how much home you can afford. An online calculator can help determine your monthly mortgage payment based on home price, down payment, interest rate, and loan term. But, there are other costs besides the mortgage payment that needs to be factored into your budget. These costs include property taxes, homeowner’s insurance, home maintenance and repairs, and homeowner association fees (if applicable).
Once you’ve estimated your monthly payment, get pre-approved for a mortgage. Make sure you have a preapproval letter from your lender and not a prequalification letter.
- A prequalification letter is when your lender states you are prequalified for up to a specific loan amount. This is only a rough estimate based on your credit score and annual income.
- A preapproval letter for your lender is the actual mortgage amount you qualify for. This amount is based on official documents including your credit report, bank statements, and W-2s. Thus, it carries more weight than a prequalification letter.
Often, real estate agents will wait until you get a preapproval letter before working with you. Sellers will also take you more seriously once you have a preapproval in hand.
Find a Trusted Real Estate Agent.
The home buying process can be complicated, stressful, and emotional. Look for a real estate agent that not only knows homes in your desired neighborhoods but also has your best interests in mind throughout the home buying process. Having a trusted agent by your side can help you navigate the housing market, write an offer letter on your behalf and assist in negotiations. To find a real estate agent, start by asking friends and family for recommendations.
Start House Hunting.
Like much of the homebuying process, you can start your search by reviewing available homes online. Keep these things in mind during your search so you have an idea of the home you want to purchase:
- Property taxes
- Square footage
- Number of bedrooms/bathrooms
- Condition of home (move-in ready vs. potential repairs)
- Local amenities (entertainment, restaurants, public transportation)
- School district ranking
Make an Offer.
Once you find a property you like that fits your needs and budget, it’s time to make an offer. Your real estate agent will help you make an offer on a home. The offer must be submitted in writing and include your name and current address, your offer price, and a deadline for the seller to respond. Once the seller accepts your offer, you will need to come up with “earnest money,” usually 1-2% of the purchase price, which shows you are serious about buying. These funds get deposited into an escrow account and are applied to the down payment or closing costs. In some cases, the funds are returned to you after closing.
Request a Home Inspection (and Appraisal).
A home inspection isn’t required for a home loan, but it’s a smart move. Your real estate agent can arrange for a home inspector to go through the property to look for structural damage or things that require repair. Once you receive the results, review each item line by line to check for major issues such as lead paint or poorly installed windows. Based on inspection results, you can request that the seller addresses any problems before closing. If any repairs are required, you’ll have a chance to do a walk-through before the sale is final to confirm their completion.
Close on Your Home.
Three days before the scheduled closing, your lender will provide you Closing Disclosures. These documents tell you what you need to bring to closing, the funds needed at closing, and summarize your loan details. Review your Closing Disclosure to ensure the numbers don’t vary too much from your initial Loan Estimate.
At closing, you’ll pay a down payment on your home and closing costs. You’ll also sign several documents: a settlement statement, mortgage note, and deed of trust to secure the mortgage. Once everything is signed, you’re officially a homeowner.
When you’re looking for an outstanding resource for mortgage financing, look no further than Pacor Mortgage! Our 33 years of experience is what makes us the optimal choice for your mortgage needs. For more information about our services or to schedule an appointment with us, call us at 773-881-7744 or fill out the contact form on our website!
2021 Pacor Mortgage Corp. Pacor Mortgage Corp is located at 14930 Cicero Ave, Oak Forest, IL 60452, Phone 773-881-7744 (Unique Identifier #120945). For Licensing information, go to: www.nmlsconsumeraccess.org. Pacor Mortgage Corp is an equal housing lender and is licensed by the Secretary of State under the Illinois Residential Mortgage Lending Act and is assigned Illinois Residential Mortgage License MB.0000892. Pacor Mortgage Corp branches operate with the following licenses and is assigned Illinois Residential Mortgage License MB.0000892-001, with a Wisconsin License # 260345BA, Palos Heights NMLS 261297 and is assigned Illinois Residential Mortgage License MB.0000892-008, Colorado, Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, California license # 41DBO-67516, Florida MLD1075, Indiana DFI 13177, Maryland 23528, Michigan FL0828, Michigan SR1130, Minnesota MN-MO-120945, North Carolina L-184546, Ohio RM.804151.000, Pennsylvania 43855, South Carolina, MLS – 120945, Wisconsin 120945BA, Kalamazoo, MI NMLS 120945 also DBA Lake Pacor Home Mortgage. This is not an offer for an extension of credit, a rate lock or a commitment to lend. All loans must satisfy company underwriting guidelines and any investor overlays. Any of the advertised products may be discontinued at any time. Information and pricing are subject to change at any time and without notice. Loans are being committed and closed at expressed rates although these rates change and may not be available at time of your lock in, commitment and / or closing. Pacor Mortgage Corp is not affiliated with your current lender, nor is it an agency or extension of the Federal Government, Fannie Mae, Freddie Mac or HUD.