5 Steps to Follow When Buying A Home
Purchasing a home can be quite a complex proposition. Here we take a look at the steps involved in the home buying process, and what you can do to make it simpler.
- Deciding To Purchase a Home
You have to make numerous decisions while purchasing a new home. The most important of them being the duration for which you are planning to stay there. It is advised to buy a house only if you are planning to live there for between 2-5 years. In many places, you may find renting to be much more affordable than owning the house.
Aside from mortgage payments, there are many more responsibilities that come with a property purchase such as, paying for insurance, sticking to a budget and also repairs. Consider what reasons are making you more inclined towards buying a home. Tired of renting places and want to have a place of your own? Starting a family? Or trying to make some money in real estate?
- Checking Out All Your Options
If you are a first-time borrower it isn’t mandatory to make a down payment. However, you will end up saving a considerable amount of money on your mortgage if you choose to make a down payment. Typically, it should be 20% of the price of your house. After evaluating home prices in different areas, you may find some places to be a lot more affordable than others.
Take what experts say into consideration on whether the prices will increase or decrease. By using a home affordability calculator you can determine how much money you can spend on the purchase. Take a look different mortgage rates and then calculate a few of the basic mortgage options. You can then determine whether the rates will increases or decrease in a couple of years.
If you are confused about whether to opt for a fixed rate or adjustable mortgage rate, speak with a few of the people living in the area that have bought homes in the last few months. Asking them for some advice on some of the challenges they had to face and what tips they can offer may prove to be effective while making your final decision.
- Get A Mortgage Pre-Approval
First, start off by comparing different mortgage rates online. You can visit websites of online lenders which will help you estimate different mortgage options. You can also evaluate options with a local bank or credit union. A lot of companies offer “pre-qualify” systems that help you estimate what you can afford and what you cant. This is an excellent step for evaluating the different lenders. However, it isn’t the same as pre-approving. After narrowing down your search to just a couple of lenders, you can then apply for a pre-approved mortgage with each of the companies. Every application causes a drop in your credit score, this is why it’s advisable to apply with moderation.
- Shop For A Great Home
Compile a list of all the different features that you are looking for in a home, like the number of bedrooms or closets and take this with you every time you visit a house. Looking at different properties each day makes it difficult to differentiate one from the other. Write down notes on every house you visit, this will make it easier for you to make a final decision. Take a note of all places that require repairs and calculate the amount of money it will take you to fix them, this can help when you are negotiating the price of the house.
- Finalize The Deal
Organize a home inspection, as this is an important step before purchasing a home. Spending up to $200- 400 on an inspection can bring to light any potentially serious problems in the structure. In fact, you can use the home inspection report to negotiate a better buying price if you are keen on purchasing the property. Evaluate all your homeowner’s warranty and insurance options and look for ones that give you the best deal. Contact your mortgage lender for your final loan approval.
Ensure that all closing documents are in place by getting them reviewed by your attorney or agent. Following these steps is essential to making a smart property purchase. Let us help make your next Real Estate transaction a successful one!
