Before our Eastside of L.A Real Estate Agents dive into the Top 10 Real Estate Loan tips, we want to remind you that purchasing a house, condo, or apartment is one of the largest financial commitments you’ll ever do.
This is typically where an exceptional Eastside of L.A Real Estate Agent and an incredible Mortgage Broker come into play, making sure you clearly understand the process every step of the way.
Lets take a quick look at the 3 steps to purchasing a house in the Eastside of Los Angeles.
There Are 3 Key Steps To Buying A Home:
1) Get a loan pre-approval
2) Figure out how much you can afford
3) Look for a house.
Top Ten Real Estate Loan Tips:
1. Improve Your Creditworthiness
Most professional Eastside of L.A. Realtors will tell you that your credit profile is very critical to a lender. While you’re getting ready to purchase a home, be sure you’re responsible managing your current debt, and discuss with your tax person, CPA, or financial advisor if possible.
Furthermore, our Eastside of Los Angeles Realtors suggest that you make sure you always pay your bills on time and chip away at your outstanding balances by paying more than the minimum whenever possible. A majority of the time, lenders tend to like when they see a borrower with a debt-to-income ratio of 30% or less. Moreover, make sure you’re paying down your higher interest rate debts first like student loans or credit cards.
2. Save For Money Down
Although a 20% down payment on a mortgage is the perfect amount, it’s not necessarily needed. A handful of lenders expect buyers to put down a minimum of at least 3%, aside from the Federal Housing Administration, which requires a 3.5% down payment (FHA) Loans.
Nonetheless, if you’re interested in building sizable equity immediately, our Eastside of Los Angeles Buyers Agents advise you to stash a good amount of cash away to take to the closing table.
Additionally, our Eastside of LA Buyer’s Agents suggest you do your due diligence to try and find any local down payment assistance programs that may be available to you.
3. Research Available Loan Types
A fixed-rate mortgage isn’t the ideal choice for home buyers anymore. Neither is an adjustable-rate mortgage. If you plan to stay put in a home to raise a family, our Eastside of Los Angeles Buyer’s Agents suggest that you think about a 30-year loan.
If you’re planing on moving in 10 years or less, an adjustable-rate mortgage, or ARM, could better fit your needs. Interest rates on ARMs are fixed for the first couple of years of the loan and often begin lower than rates on 30-year fixed loans.
There are also jumbo loans, which are becoming more common in the Eastside of Los Angeles Real Estate market and not just reserved for buying luxury homes anymore.
4. Think About Your Lifestyle
Our Eastside of Los Angeles Buyers Agents say when you purchase a home, you’re also investing in the community that surrounds it. Are you a Downtown Los Angeles artist hipster type not needing grass or public school districts or are you planning on the white picket fence in Los Feliz with 2.5 children?
Our Eastside of Los Angeles Buyers Agents advise you to make your home the central aspect of your life. As you shop for homes, think about your work commute and extracurricular activities in which you and your family might be a part of.
5. Make Sure To Budget Well
Your monthly mortgage payment won’t be the only expense you have as a homeowner. There’s also homeowners insurance, property taxes, maintenance costs, homeowners association fees, and the list goes on and on, which is why our Eastside of Los Angeles Buyers Agents suggest you stick to a budget.
6. Consult A Few Professionals
The home buying process is a bit complex but doesn’t have to be so daunting, which is why it helps to have the help of qualified professionals surrounding you that you feel comfortable working with and that you genuinely trust.
Ask questions of your lender and real estate agent, or financial advisor, and reach out to a housing counseling agency approved by the U.S. Department of Housing and Urban Development for further guidance.
More information can only help, but you don’t want to be so cautious that you miss the perfect opportunity. Our Eastside of L.A. Buyer’s Agents advice you to trust the experts and follow your gut.
7. Shop For A Lender
The home buying process involves more than just trying to get a favorable interest rate. Additionally, our Eastside of Los Angeles Buyers Agents say you have to find the best mortgage lender for your specific financial situation.
The large banks such as Wells Fargo, Chase, and Bank of America can be ideal for discounted interest rates and preferred loan terms, however; most Eastside of L.A. Real Estate Agents will tell you that their lending guidelines are not that flexible so if you don’t fit nicely inside their pre-designed boxes, unfortunately you are out of luck.
Regardless, there are hundreds of alternative loan options outside of the traditional banks you’ll potentially have as options. And it’s good to remember that no two set of lender fees are alike, so it’s important to get loan estimates from a variety of lenders before making your final choice.
8. Look For A Pre-Approval
Before you rush into house-hunting mode, our Eastside of Los Angeles Listing Agents suggest that you get a mortgage pre approval from a mortgage broker you trust. This process is used to help determine how much money you’re qualified to borrow for a home purchase.
Once you’re pre-approved, and if you’re working with an experienced mortgage broker, generally that process shouldn’t take longer than a few days, you’ll have a more realistic expectation of which for-sale houses fall within your budget.
9. Don’t Forget The Closing Costs
Not only do you need a good down payment for a home purchase, but make sure you don’t forget about paying the closing costs. The loan estimate you receive after applying for a mortgage gives you a better idea of the “cash to close,” or the money you need to complete the transaction. There are some closing costs for which you can shop and save money, and others that are fixed.
10. Rainy Day Emergencies
Our Eastside of L.A. Buyers Agents say it’s not encouraged or practical to drain your savings to fund your down payment or closing costs and leave nothing in the account to cover emergencies. A useful rule of thumb is to stockpile 3 to 6 months worth of living expenses away that you never touch. That money is there strictly as an emergency fund. This deters you from tapping credit cards or loans and amassing more horrible scary debt.
If you follow these easy real estate loan tips, the home buying process will be virtually seamless and painless.