A Place in the of Heart of the City

If that number is lower than the bank’s, play it safe and go with your calculations. Pre-approval, however, means that the lender has done the legwork of pulling your credit report, checking your debt-to-income ratio, and running a more in-depth analysis of your financial situation. The result is an official pre-approval letter than can be help seal the deal when negotiation with a seller. Pre-qualified means that you’ve told a lender your income level and your debt and credit information, and the lender estimated what you can afford. Notice that there’s a difference between getting pre-qualified and getting pre-approved.

Sellers know that a pre-approved offer is more likely to result in a completed sale, which might convince them to accept a lower price. In most cases, you’re expected to make a down payment of at least 20 percent of the home price to secure the loan. The monthly mortgage payment is only part of the expense of buying a house. Throughout the pre-approval process, there are some key facts to remember. To do that, you’ll need a significant sum of cash on hand.

You could argue that this arrangement still favors the seller, since even the buyer’s agent will want the highest commission possible. If the agent negotiates the price down to $140,000, his take is only $300 less. Pay close attention to the contract you sign with a buyer’s agent. For example, if the total commission on a $150,000 is six percent, then the buyer’s agent takes home half, or $4,500. Buyer’s agents counter that the difference in commission is usually so small that it doesn’t affect their loyalty to the buyer.

If you have small children, get a babysitter. Congratulations! Now you can start worrying about the move. All of your attention needs to be focused on listening to the closing agent and double-checking the documents. Incredibly, after the last document and check is signed, the closing agent will hand you a set of keys to your new home. How do I prepare to buy my first home? To prepare to buy your first house, pay down high interest debt, keep an accurate monthly budget, save for a down payment and closing costs, get pre-approved for a mortgage, find a real estate agent you trust, and then start looking at homes within your set budget (and stick to your budget!). For lots more information about mortgages, real estate agents and home buying tips, explore the links on the next page.

Some listings offer virtual online tours and most include lots of interior and exterior photos. Together, you and your realtor will assemble a list of the top homes to visit in person. You can even use convenient online calculators to estimate your monthly mortgage payment including property taxes. Your agent will make appointments with the sellers’ agents for showings. Most showings are done when the current owners are out of the house. This is the exciting part. Online listings include useful information like how long the home has been on the market and stats about the local school district. In some cases the seller’s agent is there to tell you more about the house.