Teaching is your passion and profession, and you give it your all every day in the classroom. After you finish your busy school day, do you long to retreat to a home of your own? If so, prepare to get ready to start house hunting because purchasing your own home is possible.
Use your training in organization, communication, and research to make the home buying process a success. Here are three steps to start you on your way to a new home.
Step 1: Organize Your Finances
Do you know how much money you can afford to spend on a house? The first step in buying a home is determining how much you want to spend. The amount that you can allocate for house payments depends on both how much money you can pay and how much money you want to spend.
Create a Realistic Budget
Sit down and write down everything that you spend money on each month. Make sure that you include cash for lattes, movies, and all the little things that make you smile. Compare the expenses with the amount of money that you bring home each month. With this information, you can begin to get a pretty decent idea of how much you can afford to spend on overall housing payments each month.
Collect Down Payment Money
How much money can you devote to a down payment on a house? In the past, buyers were expected to commit at least 20% of the purchase price as a down payment when making an offer on a property. Thankfully, buyers, today can qualify for outstanding home loans with much lower down payment requirements.
There are a lot of numbers involved in buying a house and one of the most important numbers is your credit score. Lenders rely on your credit score as an indicator of how likely you are to pay your mortgage on time.
When you apply for credit, such as for a home loan, the lender requests a copy of your credit report. Along with a current copy of your credit report, the credit reporting agency examines your credit data to determine a credit score.
Along with your payment history, a credit score is based on your:
- Types of credit (ex. Auto loan, student loan)
- Percentage of available credit
- Age of credit
Credit scores, also known as a FICO score, range from 300-850. Lenders place a premium on high scores and borrowers with scores above 750 enjoy the lowest interest rates and most favorable loan terms.
You don’t need to surrender to a lifetime of renting just because your credit score isn’t perfect. There are many home loans available to borrowers with average credit scores.
It’s an excellent idea to get a copy of your credit report from one of the credit reporting agencies early in the home buying process. Amazingly, it’s not rare for a credit report to contain errors that unfairly lower a credit score. Read the information very carefully and notify the credit reporting agency of any mistakes.
Step 2: Communicate with a Lender
Once you have a working idea of your finances, it’s time to speak with a reputable lender about your financing options. Prepare ahead of time by gathering together recent pay stubs, tax returns, bank statements and other documents demonstrating your financial situation.
Expert loan specialists throughout the country affiliate with Homes for Heroes to provide access to outstanding home loans and discounted loan fees to Heroes like you. To find out about your home loan options, SIGN UP and let us connect you to an experienced loan specialist in your community.
Questions for Your Lender
Experts recommend that you ask a prospective lender lots of questions to make sure that you receive the loan that best fits your situation. You communicate in the classroom; use those skills when working with your lender. Here are some suggested questions.
What is the interest rate?
What are the loan fees?
How far in advance can the interest rate be locked-in?
Is there a minimum down payment required for the loan?
How long does it typically take to get the loan?
Is there a prepayment option?
Loan Pre-Approval Letter
Obtain a loan pre-approval letter from your lender as soon as possible so that you know for sure how much money the lender will loan you for a home purchase. A loan pre-approval letter gives you confidence that you can obtain financing and it helps you to negotiate with a seller.
Step 3: Research Housing Opportunities
It’s time to put all of your work budgeting and communicating with a lender into action. Collaborate with an expert real estate specialist who understands your needs as well as the real estate market in your area. A real estate professional will direct you to houses that fit your needs and pocketbook and then negotiate a terrific deal for your favorite one.
Homes for Heroes has a nationwide network of real estate professionals committed to assisting Heroes with their home purchases. Along with helping to find you a terrific house, a Homes for Heroes real estate specialist will return part of their commission to you after the sale. You’ll receive a Hero Rewards check worth $700 for every $100,000 of the purchase price a few weeks after closing if you use a Homes for Heroes affiliate real estate specialist to buy your house. SIGN UP and let us connect you to an affiliate real estate specialist in your area.
Lastly, use the same skills that make you such a successful educator in your house search. Before long, you’ll be crafting lesson plans and grading papers in your own home.