Congrats on getting to the point where you are ready to buy a home! Here are some key pieces of advice that you may want to know before you sign those papers!
- Make sure you understand your loan options. FHA, Conventional, VA, USDA loans. All the loans have distinct advantages and disadvantages. I highly recommend a conventional if you cannot qualify for a VA loan. FHA loans are great if you credit score is lower or if you can’t put down enough to qualify for the FHA. But with the FHA loans, you will pay much higher private mortgage insurance (PMI), and you will pay it for the life of the loan (all 30 years!). But with a conventional, the PMI is lower and will go away when you reach 20% equity in the home. A VA loan is great for those that are veterans! You can put no money down on the property and pay no PMI. However, you will have a VA funding fee, so they are not always the cheapest option. Bottom line is, speak with your mortgage officer about the different products.
- Shop mortgage companies! Just because you had someone say, yes, doesn’t mean it will be the best loan available. As with anything with home ownership, always get three quotes!
- Get that home inspection! You need it. Yes, it will cost you a couple of hundred, but it is a necessity. Also, walk through the home inspection with the inspector. Yes, this means more time off your schedule, which sucks. But just reading a report won’t tell you whether something is normal, something will need eventually fixed, or whether it is a huge issue and needs fixed ASAP. Also, it allows you to ask more informed questions to your home inspector! Something that doesn’t hurt at all!
- Above all else, have a good realtor who knows what they are doing. Don’t rely on a friend just because they are a friend!