Homebuyer’s guides – What image does that phrase conjure up in your mind? To us, it means the right people. As prices continue to escalate all over the US, it’s increasingly clear that the real estate market is hotter than ever. According to Corelogic, the prices of homes increased by 19% in 2021 compared to the year before.
For homebuyers, getting the best deal you can is crucial. If you’re new to homeownership, you ‘ll want to seek advice from experts in the field. Here are four guides you need to consult with when buying a house:
1. Financial Guide – Financial Advisor or Planner
How are financial advisor considered homebuyer’s guides? A home is the most expensive thing you will probably ever buy.
A financial advisor can help you see the big picture of what your finances will look like before, during, and after purchasing your home. When choosing a financial advisor look out for professional certifications in finance and accounting. The Certified Financial Planner (CPF) and Certified Public Accountant (CPA) certifications are the most common. Many of these financial planners will have prepared for the CPA exam while taking their bachelor’s degree in accounting, giving them a comprehensive financial background. Planners with these certifications are trained in skills such as financial accounting and tax strategy. They can advise you on your cashflow before the purchase, how much you can put into investments after the purchase, how much you can continuously save, and when you can potentially retire. Consult with your financial advisor to help you understand where owning your own home fits into your financial plan.
While a financial advisor is an expert in finances and (hopefully) your financial situation in particular, they aren’t usually experts in the mortgage field. Neither are mortgage advisors experts in giving financial advice. What to do? Have your mortgage advisor and financial advisor talk to each other; have them collaborate to give you the best customized advice for your particular circumstances, goals and concerns. To that end…
2. Loan Guide – Mortgage Advisor
You aren’t likely to buy a home without a mortgage, so a competent, ethical mortgage advisor is one of your best homebuyer’s guides. Applying for a mortgage loan to secure your dream home can be very confusing and stressful. A mortgage loan consultant can ease the burden and help you understand the terms of your loan. Getting the best deal isn’t always straightforward, so finding the best price with the lowest rates takes skill. Our previous guide contains tips on how to shop for the right lender as well as what type of lenders might be a bad choice for you.
A loan consultant will get to know you, your financial situation, what you can qualify to buy and what monthly costs you are comfortable with. They’ll already know the market interest rates, so they can advise you if the mortgage offer is a good fit or not. Also, if they are a broker or a direct lender (not a bank or credit union) they can even go shopping on your behalf to get you the best deal possible.
Finally, a mortgage advisor can advise you on whether you need to work on your credit or not. See number 3.
3. Credit Guide – Credit Expert
A credit expert isn’t exactly a homebuyer’s guide, but one of the most important parts of purchasing a home is finding the right loan. Lenders will start with checking your credit score – usually your FICO score. A score of 700 and above is considered good, and 760 and above is excellent. Do you need to increase your score? It depends. This is where a competent, experienced mortgage advisor’s input is invaluable. Sometimes it’s better to spend limited resources – time and money – on increasing your credit scores, sometimes they’re better spent on something else, like loan costs or additional down payment.
If needed, a credit expert can check your full credit report and review all the details. Credit experts can tell you how to strategically lower your debts, distribute payments to creditors, and slowly build up your credit to achieve a higher FICO score, which could lead to better rates when you apply for your home loan.
4. Homebuyer’s Guide – Real Estate Agent
While it makes no sense to see your real estate agent until you’ve completed your work with the other three experts, your real estate agent is obviously your most important homebuyer’s guide. Every market is different, and a real estate agent will know the local market of your future house better than anyone. They’ll be able to tell you the past prices of homes, whether the market has gone up or down, the causes of fluctuations, as well as predict where the market is headed. An experienced, competent local Realtor® can advise you on the listing price and whether it is fair for the property.
Buying a house is not easy, and many people do make mistakes. By consulting with the four homebuyer’s guides mentioned above, your buying experience will be a lot easier, and your dream house can finally be within your reach.
Article written for the exclusive use of loanguide.com
By Alicia Marshall and CaseyFleming