So you want to buy a home. A mortgage is most likely the biggest purchase you will make in your lifetime. As with any major purchase, you can get the best value for your dollar by being an informed buyer. Get ready to get schooled by local experts in the home buying process:
The Role of the Real Estate Agent
Frequently, the first person you consult about buying a home is a real estate agent or broker. Not only are you getting professional expertise, but this person is a great source for vendors such as inspectors, workmen for bids, and even lender referrals.
It doesn’t cost buyers anything to have a real estate agent in the state of Missouri. The seller pays the commission.
Getting pre-approved will make the whole process go more smoothly and make your offer more desirable to a seller. There are a few things that can affect pre-approval like your credit score, employment history and income, assets, and current debt-to-income ratio.
If your credit report shows that you do not have a good credit history, talk to your lender. Not all credit issues will keep you from being pre-approved. Your lender can give you suggestions on how to re-establish credit. It is important to keep in mind, though, that adverse credit information may affect your interest rate.
Once your loan information is approved, you will receive a pre-approval letter that is good for 90 days.
An inspection should determine the condition of the plumbing, heating, cooling and electrical systems. The structure should also be examined to assure it is sound and to determine the condition of the roof, siding, windows and doors. The lot should be graded away from the house so that water does not drain toward the house and into the basement.
Most buyers prefer to pay for these inspections so that the inspector is working for them, not the seller. In some cases, you may want to re-negotiate for a lower sales price or require the seller to make repairs.
You’ve invested a lot of time selecting the right home, but choosing the right coverage can be confusing. For most people, their home is the single largest purchase they ever make. Regrettably, most people buy homeowners insurance just so they can get through the closing and then never look at it again. That is, until they have a loss.
Dwelling coverage applies to the residence premises as shown on your policy. This includes structures attached to the dwelling, materials, and supplies located on or next to the residence premises that will be used to construct, alter, or repair the dwelling or other structures on the residence premises. This coverage does not apply to land.
Personal Property Coverage applies to your personal possessions—including furniture, clothing, and appliances. Policy limits, terms, and conditions apply.
Loss of Use or Additional Living Expenses covers you in the event your home is unlivable due to a covered loss. This policy would cover the additional necessary expenses you incur, up to the limits stated in your policy.
It is important to choose a deductible that you are comfortable with. Most people start with 1,000, but typical options include $500-2,500.
HOME BUYING ACTION PLAN
- Determine your price range
- Select a real estate agent
- Select a lender and get pre-approved
- Find “the house” and negotiate a contract
- Get the home inspected
- Insure the property
- Close your loan and take possession