Process Overview >> Modern House Buying
The Process of Buying a House - A Modern Look
by Brandon Cornett
The process of buying a house has changed significantly over the last few years. In fact, when you compare the mortgage and house buying scene of the 1990's to today, you can see a stark difference.
As a result of economic changes and other factors, consumers who are planning to buy a house should first understand certain concepts. In this article, we will examine some of the things that are different about buying a house today, and how it affects the buyer.
Economic Changes Affecting Buyers
The subprime mortgage crisis of 2007 - 2008 caused widespread economic changes. Many lending institutions went out of business, and thousands of Americans lost their homes due to foreclosure. This caused a general tightening of credit that affected consumers and businesses alike.
As a result of these and other factors, the process of buying a house in today's market is more challenging. For one thing, buyers need better credit scores to qualify for the best mortgage rates these days. Additionally, buyers with bad credit have fewer options today, because the subprime mortgage is practically extinct.
Credit has always been important when buying a house and applying for a mortgage loan, but today it's more important than ever. So there we have our first lesson for the aspiring home buyer -- you need to maintain a good credit score if you have one, or improve your score if it's low.
* Related article: Credit Score Needed to Buy a House
Professional Help When Buying a House
Another thing that's different about buying in today's economy is the diversity of real estate professionals that the modern buyer can choose from. In years past, there was really only one kind of real estate agent. They all performed the same basic tasks, and they all expected the same commission level -- more or less.
Today, however, there are all kinds of real estate business models. It's an important factor to understand when buying a house because it directly relates to your choices in professional representation. For example, there are companies today that offer select services for a lower commission than what a "traditional" real estate agent will charge.
So when you are buying a house in today's market and looking for professional help, be sure to learn about all of your options.
Internet Tools for House Buying
These days, there are a lot of websites that can help you when buying a house and seeking a mortgage loan. In fact, almost every aspect of the real estate transaction can be done online today (aside from the actual transfer of property). You can look at homes online, research neighborhoods, get mortgage quotes from lenders, find an agent, you name it.
With all modesty aside, there has also been an increase in the number of helpful, informative and objective house buying websites ... just like this one!
Being able to do so much research online saves you a lot of time when buying a house in today's market. For one thing, you can use the Internet to narrow down the area in which you would like to live. By focusing on certain neighborhoods like this, you will greatly reduce your house hunting and driving time. There are also certain mortgage websites you can use to get quotes from multiple lenders at once. Again, this is a big time saver.
Online Real Estate Calculators
While real estate calculators have been around for a while, they've become a lot more advanced (and useful) in recent years. These days, there is a calculator to help you with every aspect of buying a house from setting your budget to figuring out mortgage payments. Better still, you can use most of the calculators online for free. We have a few here on our website, and the finance section of Yahoo.com has many available.
House Buying Seminars
Another rising trend I've seen in recent years is the number of house buying seminars being offered by real estate agents and mortgage professionals. I'm actually glad that this is a rising trend, because in the past there has been a lack of consumer education on topics related to buying a house and applying for a loan.
I think that today's real estate agents and mortgage lenders realize the need for consumer education, especially in light of the recent mortgage fiasco that helped send the country into a recession. The best way to find an event like this in your area is to do an Internet search with your city name and the words "home buying seminar." You should be able to come up with something.
Mortgage Options When Buying
Here's another area where you have more options than in the past. When buying a house and applying for a loan, you have a wider range of mortgage products to choose from today. While most of these loans fall into one of two categories (fixed or adjustable rate), there are many "hybrid" options as well. There are also all kinds of variations of the fixed-rate and the adjustable-rate mortgages.
Of all the topics covered so far, this is probably the most important. The type of home loan you choose will affect your financial future in many ways. And choosing the wrong mortgage (or buying over your head) could lead to disaster. Just ask the thousands of people who had their homes foreclosed on over 2007 - 2008. Many of them failed to do the proper research into mortgage loans before buying a house and taking a loan.
I hope you have enjoyed this guide to buying a home in the modern economy. More importantly, I hope it helps you navigate the path to home ownership with greater ease. Good luck with your buying process.
- Quotes from multiple lenders.
