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HOW TO OWN YOUR DREAM HOME
Before taking the plunge into the buyer pool, it’s important to consider whether homeownership is right for you.
Rent vs. Buy?
When looking for a new place to live, the first question you ask yourself will help drive the rest of your decision-making. Should you rent a home or buy a home? Buying may seem appealing because you will put an end to escalating rent and can build equity. But the reality of routine home maintenance and repairs can quickly drain a bank account.
Whether renting or buying is better for you largely depends on your specific circumstances.
Here are some basic questions to consider when thinking about buying a home:
- How long do you plan to stay in your home? If you expect to relocate in just a couple of years, renting is likely a better option.
- How much home can you afford? If you can’t afford a home large enough to fit your family in a few years, it may be worth it to rent while you save a bit more.
- What’s on the real estate market? If you can’t find a home you like, it’s likely not worth tying yourself to something you’re unhappy with.
Another factor to consider: The current housing market is one of the most competitive in decades, with record-high prices.
That means buyers should be prepared to make multiple offers and be aware that they may have to pay more than a home is listed for — sometimes thousands of dollars more — in order to get their offer approved.
Still can’t decide if buying is for you? Check out The Times’s rent-versus-buy calculator to dig deeper into the difference in expenses. If both your lifestyle and the hard numbers point toward buying, the next step is to determine how much home you can afford.
1. Check Your Credit Score
Lenders use credit scores, also known as FICO scores, to evaluate the potential risk of lending to you. The higher the number, which runs from 300 to 850, the better your score. The best mortgage rates go to borrowers with credit scores in the mid- to high-700s or above, according to the Consumer Financial Protection Bureau.
To find out where you stand, go to annualcreditreport.com, which offers a free report annually. Be aware that the three major credit-reporting bureaus, Equifax, Experian and TransUnion, generate their own FICO scores based on the data they collect.
2. Get a Mortgage Preapproval
A pre-approval letter is a written estimate from a lender of how much you will likely be able to borrow from them. This letter will help you determine how much you can afford, and help demonstrate that you can secure a home loan when you are ready to make an offer on a house. Getting pre-approved for a mortgage is different from getting prequalified for a loan, which is essentially a back-of-the-envelope calculation of how much of a loan you may qualify for based on unverified information. The preapproval application for a mortgage often requires submitting pay stubs, bank statements, tax returns, and other financial documents. Take the time to get one now, so you’re ready to make an offer as soon as you find a home you love.
3. How to Find a Real Estate Agent?
You can find homes for sale on your own, but a top realtor can help you make sound decisions and guide you through the home-buying process. A real estate agent can also help you get access to homes as soon as they hit the market, before they may be listed online... MLS Listings!
How to find the right Realtor for you? Talk to friends and family members who have bought or sold recently in your area. Look for a real estate broker (Realty) who has a track record working with home buyers in your situation, and who will get back to you promptly. Your broker works for you but doesn’t get paid unless you buy a home. The commission is paid by the home seller.
Home Luxe Peter Nicado Group Realty
1003 Bishop Street Suite 2410 Honolulu, HI 96813
Top Real Estate Agents in Oahu
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Peter Nicado is a pioneer, innovator, and influencer in the world of real estate.
He is a real estate broker with more than 20 years of experience who has built his reputation by providing a superior level of professional service and support to his Realtors.
Today, Peter is the CEO and principal broker of HOME LUXE Peter Nicado Group Realty in Honolulu. Peter Nicado is also an #1 International bestselling author, an internationally sought-after speaker, a popular TV host/producer of the LEVEL-UP TV program, which encourages people to Be more, Do more, and Have more in their career and life!