There are significant financial implications involved with purchasing and selling a piece of property. For that reason, most individuals choose to work side by side with a professional real estate agent since this can increase their chances of a successful real estate transaction. Aside from getting help from an experienced realtor, there are three other factors that are involved in ensuring that a real estate deal closes smoothly.
While it is not required that you get preapproved before you start looking at houses that you are interested in, it can definitely help speed up the process. Getting preapproved for a mortgage also makes you look better to sellers while putting you in a better position for potential negotiations. In addition, you can get a better rate from some financial lenders.
Speaking of rates, you will want to make sure that you speak to multiple lenders so that you can compare rates to get the most favorable loan terms. In some cases, you may end up saving tens of thousands of dollars by shopping around and doing your research.
Favorable Credit Score
Your credit score is one of the many things that mortgage companies will take a close look at when determining whether they want to take you on as a client—aka if you have the ability to pay back your debts. Credit scores range anywhere from 300 to 800, and if your score to low, you may be unable to close a deal on the house that you want. To avoid any issues with getting a loan, you should make sure that you are paying all of your bills on time and work on improving your FICO score for roughly a year (or longer, if you would like) before applying for a mortgage loan.
You will need a down payment in order to close a deal on a home. The sooner you can start saving money for your down payment, the better off you will be as this is no easy task. Depending on the type of loan that you are trying to get approved for, you may only need a 3.5 percent down payment (FHA loan). However, you should strive to save as much 20 to 30 percent of the value of the home.
If you would like to learn more about what you may need, reach out to a professional real estate agent in your area today.