Knowledge and Planning Can Make the Mortgage Process Less Stressful
The home buying process is among the most stressful and intimidating events in the life of a modern American, according to a 2018 survey by Homes.com. In fact, only 20 percent of respondents said they felt confident as they entered their home search.
Becoming a homeowner doesn’t have to be scary, though. With a reliable, knowledgeable lender and a clear understanding of what’s ahead, your home buying experience could be positive and even enjoyable! Here are a few hurdles to expect, and how to prepare for them.
(So much) paperwork
Once you’ve chosen your home and you’re ready to finance, you will enter the loan underwriting process, which is how your lender assesses your ability to repay your mortgage. The underwriter(s) may request various kinds of documentation including recent bank and credit card statements, tax returns, paystubs, and employment verification. Request and gather these documents in advance, so you have them on hand if and when you need them.
You probably know you’ll need to make a down payment, but you may be unaware that there are other initial costs associated with your home purchase. Loan origination fees, title transfers, administrative fees, and other costs can add up to more than you were anticipating. In addition to your down payment, plan to pay about 3 to 7 percent of the sales price in closing costs.
Issues with the inspection
Unsatisfactory marks on your inspection report can be unsettling. It’s important to maintain perspective and consider your options. Discuss with your real estate agent methods for negotiating a lower sales price in light of necessary repairs or requesting the seller perform the repairs as a condition of your offer. If the issues are extensive, determine how much work you’re willing to take on and when to walk away.
Negotiation and appraisal
Negotiating a home’s price with the seller can be daunting. You want to ensure you’re getting a fair deal, but you want to give a competitive offer. Your agent can advise you on how to begin and continue negotiations, using their knowledge of market demands and recent prices on comparable properties. Expect some back and forth, and don’t be discouraged if the seller counters your first offer. Your agent can also ease concerns about whether your potential home will appraise at or above the sales price and advise you what to do if it doesn’t.
Many of the concerns about home buying can be eased by managing your expectations, preparing what you can, and being flexible when unexpected turns arise. A trusted lender like Open Mortgage can help. Contact us today for a consultation with one of our loan specialists.