Home Buying Tips

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Home Buying Tips


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Now is a great time to buy a home in the Bakken!  Right now a monthly mortgage payment can be much lower than a rental payment.  Owning your own home allows you to build equity, do what you want with your house and have that pride of ownership that just doesn’t happen with a rented space.  Plus, if you take on a roommate or get a housing allowance from your company, someone else is building equity for you!   If it’s been a long time, or you have never bought a house before, the process can be a little overwhelming.  Here are a few things to do to get ready to buy: 

HOLD OFF ON BIG PURCHASES AND DON’T CHANGE JOBS 
For at least 6 months before you buy, no not open any new lines of credit, and hold off on buying that monster truck!  The more stable your credit history, the better.  Also, though it seems counterintuitive, do not close any credit cards.  Lenders need two years of stable work history, preferably in the same line of work, so don’t make a job change without speaking with a Loan Officer on how it might affect your ability to buy a home.  It’s best to check with a lender before you make any financial moves; these folks know exactly what you need to do make your home buying experience as smooth as possible. 
  
GET YOUR CASH READY
If you have never done so, figure out what your monthly income total is.  Overtime pay, which is a big deal in the Bakken, may not be able to be used as income when figuring out how much you can borrow.  So when you calculate income, leave that out.  Determine your monthly expenses too, lenders will need this info in order to determine how much home you can afford.  Start saving every extra penny toward a down payment.  If you have shaky credit, it doesn’t mean you can’t buy, you just may have to put down a larger down payment or pay a bit higher interest rate.  The bigger the down payment, the more house you can afford, however if you down have a lot of cash saved, there are still many options to go with, such as an FHA (first time home buyers) loan.  Again, a lender can help you sort through the options. 
  
FIND A LENDER
Most experts in the industry recommend that before you even look at a house, you need to get your finances in order and find a lender.   There is not much more disappointing than to fall in love with that great house on your favorite street only to find that you can’t afford it.  A lender will help you get pre-qualified and pre-approved for a loan and help you determine how much house you can qualify for afford.  In the fast moving Bakken market, it is really important to get pre-approved.  Many homes in the area will get multiple offers and if you are pre-approved and have your down payment ready, you will be in a position to make a strong offer right away. Cash is king, but a pre-approval letter from the bank, cash for the down payment and the ability to close quickly is the next best thing. 
Prequalifying gives you an estimate of what you can afford, but is not official; pre-approval from your lender is based on verified income, debt and credit history.  Start with gathering the following documents: 
a.  Two most recent W-2 forms 
b.  Two most recent pay stubs 
c.  Two months of bank statements 
d.  Two months of investment and/or retirement account statements (if you have any) 
e.  Two years of tax returns 
Interview a few lenders to find one that you are comfortable working with and who can offer you the best deal on a mortgage.  Not all lenders offer the same thing; take the time to talk to a few of them. 
  
  
CHOOSE A REALTOR 
Now that you’ve gotten all of your finances in order, it’s time for the fun part, finding your new home!  Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.  Again, in this region, homes sell very quickly. Having an expert helping you navigate through the process will help to ensure that you are covering all of your bases and get the most bang for your buck. 
  
Owning a home is one of the most rewarding experiences out there.  These are just a few pointers to put you on the right track.