Once you have a specific home in mind, you’re ready to move on to the next phase in the mortgage process.
As you shop for houses, you’re likely to encounter homes that you like that stretch your budget. Before you fall in love in with a home that’s more than you planned to spend, ask yourself if you can afford it and whether it’s worth it.
Calculate the total monthly payment and update your budget to compare the impact on the budget of your target home price versus the higher-priced homes.
Update your mortgage rate expectations periodically using the purchase prices and kind of loan you are considering. Rates can change daily and impact the house price you can afford.
Update your down payment and closing cost calculations as you get further into your home search.
If you’re considering a low-down payment conventional loan, there are also private mortgage insurance options to consider. If you’re not sure what the cost difference might be between two or three kinds of loans, ask your Utah mortgage broker to give you detailed worksheets for each choice, and compare them side by side.
Most people work with a real estate agent to shop for homes. Real estate agents are paid by the seller of the home so that you do not need to worry about any additional cash to close.
Ask your friends, relatives, and other people you trust. They may be able to recommend a specific agent or a good method for finding one. Real estate websites can also help you find a home or connect you with an agent. Your mortgage broker can also recommend agents.
Choose an agent that has experience with your preferred neighborhoods, price range, type of home, and other factors that are important to you.
Many homebuyers feel obligated to work with a family member or friend who is a real estate agent. Remember that buying a home is one of the most important investments you’ll make. You need to work with an agent who has the experience to do the best job, which may or may not be your family member or friend.
It’s a good idea to make your purchase offer and sales contract contingent on obtaining financing and contingent upon a satisfactory inspection. That way, if you’re unable to get a loan, or if the inspection turns up serious flaws in the home, you’re not contractually required to buy the home.
Do your homework before making a final decision on a real estate agent. Ask for references.
Check your state’s licensing agency (Department of Real Estate) to see if there are any disciplinary actions on the agent’s record.
Know who your real estate agent represents. Real estate agents can represent the buyer or the seller, and sometimes both. Find out, for example, whether your agent will keep your conversations confidential. How would the agent or brokerage company handle the situation if you find a home you like and the agent or brokerage company also represents the seller of that home?