Now that you have the cash and credit, know what real estate professionals will support your home buying efforts, and have weighed the potential advantages and drawbacks of homeownership, you can obtain the loan that best fits your budget and payment schedule and wisely select the home that fits you (and your family’s) needs.

In essence, there are two sides to homeownership, the lending side and the property side.  It is best to get pre-approved for your home loan first.  First, you know how much home you can afford. Second, you will be able to make a definitive offer to sellers so they will know you are serious about getting a home. 

For differences between prequalifying and preapproval, and the calculations that determine your loan amount, see “The Two Sides of Homeownership:  The Home Loan”. In order to avoid predatory lending tricks and quasi-legal borrowing schemes, see the article on “Predatory Lending Schemes”.  Budgeting-help.com also has a number of resources for tips on mortgages, refinancing, and other loan-related issues.

A real estate agent can act as a guide through the home selection process, though you don’t necessarily need one if you are self-starting. However, you are limited to homes sold by equally self-sufficient sellers; their homes are listed as “For Sale by Owner”.  Other homes, which are sold by listing agents, can only be negotiated by a buying agent. You may also lose access to valuable information that agents can provide due to their licensing and realtor association memberships .

Regardless of whether or not you select your home with an agent, you should keep a few things in mind as you view, compare, or make offers for a home you are interested in:

• Get the house you can afford
• Consider needs external to the home itself, like commuting time to your job, your children’s school location, or to other centers for activity that you frequent; the farther you are, the costlier home ownership can be
• Take pictures throughout the homes you are viewing
• If it is a ‘fixer upper’, ensure that the necessary repairs are still within your budget
• Take a second pair of eyes other than your realtor (friend, family member, etc.)

The home selection and purchase process may change slightly depending on whether you decide to work independently or with a realtor.  “With or Without an Agent?” can help you make distinctions.

References

 Neighbor Works America. Realizing The American Dream

Freddie Mac. Buying and Owning a Home