Top 10 Things to Know about Homebuying

Don’t buy a home before you read our top ten things to know about the homebuying process and online mortgages. Follow these simple tips to avoid the most common homebuying mistakes.

1. Begin by building up your credit.  Filling out our form for online mortgages requires that your credit history be as immaculate as possible.  Before you begin shopping for homes, order your credit report to check it for errors.  Review it carefully for accuracy and dispute any items that are not correct.  Also find out your credit score if you can. 
2. Only buy if you can stay for a while.  Unless you are prepared to remain in a house for at least a few years, don’t buy…at least not yet.  Online mortgages and homebuying both require considerable up-front costs.  If you sell too soon, you will end up losing money.
3. A down payment of 20% is not necessary.  The old standard of a 20% down payment no longer applies to today’s market for online mortgages.  Lenders are willing to work with borrowers on as little as a 3% down payment, if need be. 
4. Buy a home you can actually afford.  A quick way to figure out how much home you can afford is to multiply your annual salary by 2.5.  This represents your limit.
5. Buy a home in a good school district.  Even if you don’t have children, this rule still applies.  When you decide to sell your house, the quality of the school district can have a significant impact on the resale value. 
6. Let a professional assist you.  Online mortgages and the Internet in general make it easier than ever for homebuyers to access information instantly.  However, the majority of new homebuyers can benefit substantially from using a professional agent. 
7. Before you shop, get pre-approved for a loan.  A pre-approval on online mortgages can heflp you limit your househunting to only those homes that you can afford.  It will also give you the upper hand with negotiations when it’s time for you to make an offer. 
8. Select wisely between rates and points.  When choosing online mortgages, you typically have the option of paying discount points for lower interest rates.  Each point usually represents a percentage of the interest that you will pay upon closing.  A good rule of thumb is if you intend to stay in the house longer than 5-7 years, opt for the points offer.  This will save you money in the long-run on interest.
9. Always have a home inspection done.  When you make an offer, it should always be contingent upon a home inspection.  Hire a home inspector to review the house you intend to buy before you sign any papers or enter any agreements.  The home inspector will tell you what kind of condition the home is in and can save you from buying a home in need of serious repairs. 
10. Research before making your bid.  Look into what comparable houses have sold for in the same area within the last three months.  If some have sold for less than the asking price, bid slightly below what others have sold for on your first offer. 

For the answers to the most commonly asked questions about online mortgages, see our FAQ page.