10 tips to help house-hunters this homebuying season

(BPT) - The spring and summer homebuying season is here, and according to recent reports, it’s shaping up to be a busy one. But buying a home can be an overwhelming process, whether you’re a first-time buyer, looking to purchase a second home or trade up to a bigger house.

Here are 10 tips to help make the homebuying process easier from financial expert Lynnette Khalfani-Cox, “The Money Coach.”

1. Decide whether to buy or rent

The answer comes down to a key question: How long do you plan to live in your next residence? In general, the longer you plan to stay, the better off you are buying a place to live.

2. Act on information not emotion

Before making any offers, get a real estate professional to provide you with “comps” or sales prices for comparable homes that recently sold in the neighborhood. You should also know how many days the typical home in the area spends on the market, as well as the percentage difference between the average listing price and the actual sales price.

3. Find a lender you trust

Choosing the best lender boils down to three factors: working with a reputable firm, having a lender you can trust and asking the right questions. Going to a direct lender such as Chase can benefit homebuyers looking for a speedy closing because using a third-party or a middleman, such as a mortgage broker, can potentially add extra time to the mortgage process.

4. Get prequalified for your mortgage

You’ll need to supply your lender with documents like income and bank statements, paycheck stubs, W-2 forms, and tax records if you’re self-employed. This will allow you to get prequalified which can shorten the amount of time between finding the house you want and actually closing on a mortgage - getting the keys to your new home.

 5. Understand mortgage interest rates

Before you approach a lender, you should know whether you prefer a fixed-rate or an adjustable-rate loan product. The type of loan you choose impacts your mortgage interest rate, along with other factors – including the size of your loan and broader economic factors.

6. Recognize the importance of your down payment

Besides avoiding private mortgage insurance (PMI), a bigger down payment makes you a more appealing buyer to sellers, gives you better access to mortgage loan products and will reduce your principal balance, lowering your monthly housing cost.

7. Prepare yourself for the true cost of homeownership

The real cost of homeownership goes far beyond principal, interest, taxes and insurance. Always think about the immediate costs as well as the ongoing costs of being a homeowner like appliances, flooring, furniture, home improvements and utilities. To get an accurate baseline, use an online mortgage calculator.

8. Breeze through the mortgage process

You can make the mortgage process go a lot smoother by knowing a few mortgage guidelines, shoring up your financial profile and helping your lender with the approval process by supplying all the requested information in a timely manner.

 9. Know the trick to ensuring a smooth closing

Ask for your Closing Disclosures in advance of settlement. These disclosures are the documents that list all of your final closing costs in detail, including costs you’ve already paid, like appraisals or inspections. By getting them before closing, you eliminate the pressure of not knowing what to expect.

10. Create a home expense fund

This fund is meant to set aside cash reserves for after you get into the house of your dreams. It should be earmarked annually to do proper maintenance and upkeep on your home.