This is a great time to buy and invest in real estate property. Interest rates are still very low. Lending options are opening up more to buyers and special FHA programs with very little down. Monthly mortgage payments in some cases are lower than rental fees and are a tax write off benefit!
The first step to take is to talk with a Lender. You can use a bank or broker lender that uses several banks. Some lenders specialize in some programs while others do not. I have a list of lenders that I have worked with that I can give you, just contact me and I will follow up with you. I do not receive any benefits from suggesting a lender over another, except the past working experience! If you have a lender in mind, please contact them and use them, I have worked with lots of different lenders. A pre approval from an email or random mailer, without putting in any information is not sufficient to qualify you for a loan. Qualifying for a loan is a long process and with much needed patience. Sometimes taking 30 to 90 days to process and close an escrow. It is best and recommend by agents to be qualified prior to even looking at property. This way you know how much you qualify for, what your payments would be and what loan program you are in. It is very disappointing to look first and be drastically disappointed to find out you did not qualify. Lenders are great in letting you know that if you don’t qualify now, how you can work toward the future in purchasing a home. If you had a short sale or foreclosure in your past you may have to wait up to three years before buying.
If you happen to be a Cash Buyer, there are a few things you should know. You will need Proof of funds in submitting an offer. Buyers closing cost is approx 1%. You will also need Home Owners Insurance to be set up at the close of escrow. If you are paying cash you can close an escrow fast, as soon as 7 days in some cases. But, you will want to make sure all your inspections have been satisfied before closing escrow!
In preparing for speaking with a lender you are going to need a few items to have handy and know a few things. 1. Last two years of taxes filed 2. Employment History 3. Proof of income ( pay check stubs, etc.) 4. Be prepared that your credit score and history will be checked by your lender. 5. Additional information might be needed as well not listed here.
You are Now Ready to Make an Offer! All offers have to be made and presented by the agent and must have and earnest money deposit. The earnest money deposit will not be deposited until escrow is opened! Be prepared for Multiple offers! Believe it or not there is a lot of competition on some properties. You may even have to go above asking price in some cases. For example: A home came on the market for $69,000 (below market value) and sold for $106,000, some properties will be listed below asking price to create a flood of offers to get the best price possible. Also be prepared that homes in this market are sometimes sold As-Is without Termite work, without home warranties and without repairs! It is wise to do all your investigations in the 17 day inspection period thoroughly! All these things can be explained and handled with ease, As your agent!