Saturday, 21 October 2017

A Quick Guide To Buying Your First Home

Written by Posted On Friday, 22 September 2017 17:51

Somewhere in America right now, someone is struggling with all of the things that need to be done before they buy their first home. If you’re also contemplating the same idea, you probably understand why they might be feeling a little overwhelmed.

Buying your first home is probably one of the most complex, big-ticket purchase that you’ll ever make in your life. It’s complicated because there are multiple steps to take for everything to work out.

These steps include coming to terms with the limitations of your budget, getting pre-approved for a mortgage, and then finding the right home. Once you’ve found the home, you have to get it inspected. At this juncture, it’s best to work with some experts, like HomeTeam Home Inspectors, who will provide you with a team of inspectors, with each specializing in a particular area.

Here are the ten steps you will need take to take on your road to homeownership:

1. Figure out your financial situation.

You need to get a clear understanding of your finances before looking at any real estate listings. This will help you set realistic expectations and prepare you to apply for a mortgage. Specifically, you need to know your income range, your monthly expenses, and your FICO credit score.

2. Work on getting pre-qualified.

After you give a lender all the information they need to get a good idea about your finances—your income, your assets, and your debts—they will decide if you are pre-qualified for a home loan. This is not an in-depth review of your finances; it’s more like an overview of your current financial condition.

3. Move on to being pre-approved.

After you’re pre-qualified, you’ll then be ready to be pre-approved. This is a much closer look at your finances. While you can get pre-qualified over the phone, you will need to fill out and turn in a proper mortgage application form to the lender to get pre-approved. You will also need to pay a fee when you submit this complete documentation about your finances. If everything checks out, particularly your credit rating, you’ll be approved for a home loan at a specified dollar amount and interest rate.

4. Start looking for your dream home

Now that you've been pre-approved, it's time to start looking for a house you can afford. To get a realistic picture of what you can get for the money you’re willing to pay it's best to find a reputable real estate agent.

5. Work with a buyer’s agent.

It’s not going to cost you anything to work with a licensed professional who is going to look after your best interests, including negotiating the best deal on your behalf. Fearless Homebuyer explains how a buyer’s agent gets paid: “When a seller wants to sell their home, they call up a real estate agent and agree on a fee.  Let’s say that amount is 5% of the sale price.  Most real estate agents are part of a Multiple Listing Service (MLS) where they agree to compensate the Buyer’s Agent (the agent who represents whoever buys the home.)”

6. Select a title and escrow company.

A title and escrow company will clear the title. They will make sure that the seller pays off any liens or debts before passing the title on to you.

7. Arrange for inspection.

After the seller accepts your offer, you’ll need to inspect the home for any hidden problems. Inspectors will do a general home inspection, a septic inspection, a termite inspection, a structural inspection, and a radon inspection. A structural inspection and radon inspection will only be done if it's considered necessary. You will have to pay about a grand out of your own pocket for these services directly to the inspection company.

8. Apply for the mortgage.

You’re now at the point where you secure the mortgage. Underwriting is the process of the lender providing the funds to buy the property.

9. Getting a property appraisal.

You and your lender will now verify that the property is worth what you’ll pay for it. An appraisal is the final step before the review and approval of your loan. This process can take up to three weeks, sometimes more.

10. Scheduling the final steps.

The final step is to schedule a walk-through and then set a move-in date. This is the last chance you have to thoroughly review the house before you sign the closing document.

As you work through this process, you'll have to be clear-headed and methodical. You can't afford the luxury of falling in love with a particular house and overstretching your budget. 

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Ryan Kh

Ryan Kh is a big data and analytic expert, marketing digital products on Amazon’s Envato. He is not just passionate about latest buzz and tech stuff but in fact he’s totally into it. Follow Ryan’s daily posts on Forumsmix. Email him at ryankh14@icloud.com, and follow him on Twitter, LinkedIn and Tumblr.

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