7 Things You Should Know Before Buying a Home

7 Things You Should Know Before Buying a Home



You are not alone.

Luminate home loan officers are here to help you. It's our mission to bring clarity and transparency to home loans—no more sending things into a blackhole and waiting for answers. It's our goal to help you feel informed and engaged at every turn. Whether you're a first-time homebuyer, you're looking to refinance, or have a unique situation, we'll help you understand all the options, so you can have the home of your dreams.


Think about the future.

Most can agree that buying a house requires a larger commitment than signing a year-long lease on an apartment. Think about what your long-term goals are. Do you want to start a family in that home? Get a dog? Start a business? According to the National Association of Realtors, homeowners live in their homes for an average of thirteen years. A lot can change in just thirteen years so make sure you are future-minded when you are starting to shop for homes.


Purchase price isn’t everything.

As with most things in life, there are many costs beyond just the “sticker price” of a house. Costs such as application fees, down payments, inspection fees, insurance, and real estate taxes add up pretty fast! Before you start your home-buying journey, make a list of all potential costs just to be sure there aren’t any surprises along the way.


There is a pre-approval process.

Unfortunately, you can’t just pick out a house you want, put down some cash and move in the next week. There is a pre-approval process every home-buyer has to go through before moving forward and house shopping. Thankfully Luminate makes it accessible in just 4 easy steps:


  1. Tell us about you.
  2. Talk through your goals and timing, so that together we can decide which loan option is the best fit for you.
  3. Fill out the application.
  4. Gather your financial details and complete your loan application to start the pre-approval process. We're always here if you have questions.
  5. Get pre-approved.
  6. Once your application and credit report have been reviewed, you will receive a pre-approval letter to begin your home search.
  7. Start shopping.
  8. Now that you're outfitted with a pre-approval letter, your budget, and information about the loan process, you're ready to get out there and start shopping for a home.


There are perks for being a first-time homebuyer.

It’s true! If you are a first-time homebuyer, the cards are in your favor. You can be eligible for greater tax breaks, federally backed loans, and you don’t have to adhere to the typical minimum down payment of twenty percent!


A new car loan could prevent you from getting your dream home.

When you know that you are gearing up to start your journey of buying a new home, don’t make any major changes that could impact your credit score. The pre-approval process is based on the time you submit your application. Decisions like getting a new car loan, or making changes in your income could potentially keep you from getting approved for a home loan.


Be realistic about what you can afford.

A good rule of thumb is keeping your housing expenses under 30% of your monthly gross income. Also, make sure to keep your debt-to-income ratio in mind when deciding what you can and can’t afford in a home. Your debt-to-income ratio is determined by how much of your monthly gross income is paying off debts throughout the month. A good DTI is typically under 36% when trying to get pre-approved for a mortgage. Thankfully you don’t have to figure all of this out on your own; a Luminate Home Loan agent is willing and ready to share their knowledge and find the right loan for you!


Although this process may seem like a lot (disclaimer it kind of is), getting the right team in your corner is all you need to make sure you are starting out on the right foot. Luminate Home Loans has many options for whatever stage of life you may find yourself in. 


Get in touch today!

Overcoming Housing Market Fears

By Luminate Marketing Team • 06 May, 2024
The recent headlines broadcasting mortgage rates surpassing the 7% mark have instilled a sense of apprehension among potential homebuyers. In a market perceived as increasingly unaffordable, it's easy to feel discouraged. However, with the right mortgage strategy, you can transform this challenging market into an opportunity.  Historical Perspective on Mortgage Rates While current rates hovering around 7% seem daunting, a historical review reveals a broader context. During the early 1980s, mortgage rates soared to 18% and even in more stable times, rates have frequently fluctuated above 10%. This historical perspective is vital because it demonstrates that while today’s rates are higher than in recent years, they remain within a historical long-term normal rate range.

Why Cash Buyers Dominate the 2024 Real Estate Market

By Luminate Marketing Team • 28 Apr, 2024
The 2024 real estate market is ROUGH. Losing to multiple offers, emotional frustration, and the stress from competing offers is discouraging to say the least. Notably 32% of home sales are being clinched by all-cash buyers, the strategic advantage of wielding cash has never been clearer. This resurgence in all-cash transactions underscores a market where immediacy and certainty reign supreme, especially as home prices continue their upward trajectory against a backdrop of scarce inventory. Within this context, it’s prudent to evaluate every option that can help you sell an existing home and get your offer accepted on a new home. Navigating the Alternatives iBuyers : These entities provide a quick, straightforward selling process for homeowners looking to bypass the traditional market. By making instant cash offers, iBuyers appeal to those seeking immediacy and convenience. However, this often comes at a cost, including service fees and potentially lower offer prices, as the iBuyer model is designed for speed over maximizing seller profits. Power Buyers : Power buyer programs cater to homeowners wishing to purchase their next home before selling their current one. They typically employ financial tools like bridge loans to facilitate this process, offering a solution to the timing mismatch between buying and selling. While this approach adds flexibility, it can also introduce complexity and additional costs into the transaction. But it's important to remember that not all of the innovative iBuyer and Power Buyer programs are the same. It's all about finding the right fit for your situation. Luminate's Unique Approach At Luminate Home Loans, we've carved out our own niche in the market. We offer a program that turns our clients into cash buyers. This isn't just a minor perk; it's a game-changer. Being a cash buyer makes your offer far more appealing to sellers, cutting through the delays that often come with loan approvals. Our approach is designed with you, the homeowner, in mind. We give you the immediate advantage of a cash offer, coupled with the flexibility to choose the best financing option for you down the line. It's about giving you control and confidence in your home-buying journey. If you're navigating the complexities of buying and selling homes, our program might just be the solution you've been searching for. We focus on ensuring our processes are straightforward, your personal information is secure, and the transition to your new home is as smooth as possible. With Luminate, you're not just moving houses. You're stepping into a well-thought-out system designed to get you into your dream home with ease and certainty. If this sounds like what you need, we're here to make it happen.

Understanding Economic Shifts: How Rising Fast Food Prices Intersect with the Housing Market

By Luminate Marketing Team • 21 Apr, 2024
Have you been noticing the prices of fast food and other products going up? Well, you're not alone. Across the country, families are feeling the financial pain of previously low-priced items suddenly costing double (or triple!) what they’re used to. For example, a lunch for two in California at a fast food chain can easily be $40 nowadays, which is a big jump for places that tout “cheap fast food.” But why exactly is this happening, and what does it have to do with you buying a home? Keep reading for more insights. Why Are Prices Going Up? Starting in April of 2024, the minimum wage for fast-food and healthcare facility employees in California was increased. As a result, their wages went from $16/hour to $20/hour in order to provide better wages and living conditions for these workers. This rise in minimum wage, while much needed for the economy, is happening all across the nation. And when businesses have to pay their employees more, they often raise their prices to cover the costs. Which, unfortunately, means the burger and fries you love might cost more now. What Does This Have to Do with Housing? In recent news, you may have heard of President Biden’s housing plan to help first-time homebuyers and to reduce housing costs. This plan would give money to first-time homebuyers and some families looking to sell their homes. But just like with the fast-food industry, the effects can vary. In some places like California, where not enough houses are available, making homes more affordable might not be enough. In other places, it might help a bit more. So, What's the Best Move for Homebuyers? If you're thinking about buying a home in the near future, it's good to know about these changes and plans. By staying informed and working with an expert lender, you can take advantage of any changes as soon as they happen. But even though extra money in the economy sounds great, it's important to look at the whole picture, like how many houses are available and how much they cost. If more homes become available and the costs of borrowing money for a home go down, this could be a better outcome for buyers vs money that is thrown into the economy. Conclusion Understanding these changes can help you make better, informed choices about your financial future. Whether you're saving up for a big purchase or just deciding where to grab lunch, let us help you save money where it counts! Reach out to us today so we can help you navigate your home-buying journey without having to skip out on the fries.
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