Before looking at Pennsylvania homes to buy, you need to check your financial situation. The first step in the home-buying process should include a talk with a mortgage loan originator at your local bank or credit union.
Secure your financing
Unless you plan on making a cash offer for a home, you should obtain a professional evaluation of your mortgage eligibility. A loan officer will consider several items.
Work history
Lenders typically want to see a two-year work history of steady employment in the same or similar type of job. Recent college graduates may have difficulty qualifying unless they worked while attending school.
Credit score
Your credit score indicates your ability to make on-time monthly mortgage payments. If you have a history of late payments, your credit score may be too low for you to qualify for a loan. If that’s the case, the loan officer can give you tips on improving it.
Income and debt calculations
It is the ratio of your income to debt that matters to lenders. You may earn an excellent salary, but if you’ve maxed out your credit cards and you’re drowning in debt, you may not be able to obtain a loan. Take some time, pay down the debt, and try again later.
Down payment
Depending on your mortgage and property type, you may pay 3% to 25% of the purchase price as a down payment. If you don’t have the cash, you might be able to receive the funds as a gift or grant. The loan officer can help you with this.
Narrow your search
Figure out where you would like to live based on the loan officer’s estimate of what you can afford. Check out school districts, and drive around neighborhoods.
Work with a real estate agent
Once you decide on some favorite locations, contact a real estate agent to help you search. They can show you properties and answer any questions you may have.
Make an offer
In a seller’s market, when there is a shortage of listings, the seller will probably get full-price offers. In a buyer’s market, sellers are usually more willing to lower the price when there are many homes for sale. Don’t be afraid to negotiate. Transactional real estate offers often involve much give-and-take on both sides. Follow your real estate agent’s advice and carefully read the purchase contract before you sign.
Buying a new home is an exciting but stressful time. These tips should help prepare you for the road ahead.
