It’s a well-established pattern: Home sales heat up every spring and summer, and then, as the leaves begin to change, the market begins to cool. By November, with the holidays looming, few people are focused on real-estate shopping. And that’s why it may very well be the optimal time to begin your hunt. Here are 10 reasons why this counterintuitive move can be a very wise one if you’re hoping to buy a house.
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- FICO is an acronym for Fair Isaac and Company.
- In the 1950’s, Fair Isaac and company created the mathematical calculation that is used to determine your credit score. It is a tool that was designed to determine one’s credit score and dependability in paying bills.
- The terms credit score and FICO score are used synonymously.
Twenty or so years ago, lenders and banks would obtain the credit scores from the credit report as a reference point. Loans were based on the overall financial strength of a borrower and their ability to repay a loan. The Scores were important but they were not weighed nearly as they are today when making a decision. If scores were on the low side, compensating factors were looked at such as: additional monthly reserves, the amount of credit accounts you carried, the amount of credit accounts that carry balances, do you have a…
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Great Article by Bill Nickerson….Be prepared as a Buyer!
In Today’s Real Estate Market, it is more important than ever to have a Pre-Qualification in hand when shopping for a home that has been prepared by a reputable Lender, Bank or Credit Union.
A mortgage loan pre-qualification is an estimate of how much house you can afford and how much money a lender would be willing to loan you. The best time to get pre-qualified is right before you start looking at homes. This way you can focus on looking at houses that are within your price range. By providing a loan officer with your income, assets, debts, and a potential down payment amount, he would then be able to give you a ballpark figure of how much he thinks you could afford to pay for a monthly mortgage. Your Credit is reviewed and your loan is submitted through an Automated Underwriting Service (AUS). There is no cost to this service and no commitment is required. This estimate is a helpful tool to you in figuring out if buying a home is a viable option, and if so, what your price range would probably be. A pre-qualification is to give you a range of home prices and in no way is a commitment to lend on a home. The time frame for this is less than 24 hours.
Getting pre-approved means that you have a tentative written commitment from a lender for mortgage funding. In the pre-approval process, you provide a loan officer with actual documentation of your income, assets, and debts. The Loan Officer is submitting this as if it is an actual loan and a property has been identified. This will be reviewed by the lenders underwriting team. The lender will run a credit check and verify all your employment and financial information. Once the final approval comes in, the lender will give you a letter of commitment stating how much money the bank is willing to loan you for a home purchase. Having a certified pre-approval in hand when you start house hunting lets real estate agents and sellers know you are serious about buying when they see you have your mortgage funding in place. By having your funding in place, it becomes an extreme advantage over other buyers when it comes to negotiating your home purchase as your offer will stand above the rest and you will be able to close in a much shorter time period. The timeframe for a Pre-Approval can take up to 5 Business Days.
It is important to note that a pre-approval and a pre-commitment is still subject to further review as any loan is. As variables change in lending or in the borrowers financial picture, additional items may be required. In addition to the financial commitment, the lender will also need to verify the property appraisal and title search.
Pre-Qualification is an estimate of a price range of what you can afford by verifying credit, income and running your loan through an Automated Underwriting System such as Fannie Mae or FHA as well as others. Pre-Approval is a verified commitment from the bank stating how much money it will loan you. Make sure your Pre-Approval is an actual commitment from the bank as opposed to a Loan Officer just doing a quick credit check.
Under the Kitchen Sink
That kitchen may have a gleaming state-of-the-art basin, but what’s going on underneath? Find out by taking a good look at the pipes to make sure they’re in good shape, and examine the inside of cabinets for signs of leaking or rust.
On the Roof
You don’t have to climb up, but you should scope out the roof from down below and from higher vantage points like second-story windows. Look for peeling or broken shingles, buckles, and other signs that materials may need replacing soon. While you’re at it, check out the condition of drainage gutters as well.
Under the Floorboards
Beware stained or warped floors, and listen closely when you’re walking from room to room. Is there a lot of squeaking or movement underfoot? That could signal shoddy construction. And if you can, head down to the basement to check out the beams and floors from down below.
In the Boiler Room
If you do get down to the basement, remember to inspect the hot water heater and any heating and cooling systems. Ask the listing agent when these systems were last replaced. Check for weird smells or noises and any signs of dripping or seepage.
In the Closets
Storage space is a major concern for most homebuyers. If that’s the case for you, stick your nose into every closet and cabinet you can. Are the shelves and rods in decent shape, and is it roomy enough to hold your clothes? Keep an eye open for telltale roach or rodent traps, too.
Behind the Shower Curtain
Staging experts often recommend buying a pretty new shower curtain, which can give your bathroom a whole new look. That’s all good, but a savvy buyer knows to look behind the curtain to determine if tiles and grout are in good condition, if there’s any trace of mold, and if the faucets and shower head function well.
Underneath the Rug
What can be swept under the rug at a house? A slew of problems, from water-stained wood to cracked floor tiles to peeling linoleum. Be polite about it, but ask if you can roll the rug up to check out the surfaces below.
Behind the Bushes
Lush plantings around a home may be a selling point if they’re lovely and well-maintained—but that landscaping may also be covering up a crumbling foundation. Do some bushwhacking to check for cracks in concrete, peeling paint, and other indications that major repairs may be needed.
On the Shelves
While you’re in each room, take a peek at the shelves and cabinets—both can can yield helpful clues about a home’s hidden problems. Do you see a ton of roach spray or mildew remover? Use these clues to formulate questions for the sellers about any ongoing issues
Over the Fence
You’re not just purchasing a home—you’re adopting a neighborhood. Take careful note of all of the neighboring yards. Do you see obvious signs of a partying crowd? Snarling dogs? A chainsaw sculpture business? It definitely pays to be nosy now if you want peace and quiet once you’ve sealed the deal.