9 Step By Step Guide to Buying Your First House | Things to Keep in Mind When Buying Home

9 Step By Step Guide to Buying Your First House | Things to Keep in Mind When Buying Home

9 Step By Step Guide to Buying Your First House | Things to Keep in Mind When Buying Home

Step By Step Guide to Buying Your First House

What is the home buying process step by step? Here are Some steps to follow when buying a home:

Finding a place to live is not always easy, especially if it is your first time. If you think buying a home seems complicated, just wait until you attempt to negotiate with a real estate agent. Still, there are some tips that can help make the process easier and stress-free.

Here are some steps to keep

  1. Find out how much you can afford (mortgage payment, property taxes, insurance and condominium fees).

This is important because you can’t afford a home if your monthly housing costs are more than 33 percent of your gross income (pretax, not after-tax).

  1. Determine which loan and rate are best for your situation based on the down payment amount and any other financial factors that are of importance.

To do this, you’ll need to work with a lender, real estate agent or have some knowledge of public and private loan programs.

  1. Choose the right home and but don’t make an offer yet as you need to find out more about the house and area. Decide how, when, and where you will buy your home (i.e., whether or not it is a good time in the real estate market to purchase).

Note that later when you put a fair offer on the table, there’s a better chance that your offer will be accepted. A fair price is one where both the buyer and seller feel content with the deal.

  1. Get a pre-approval letter from the lender to determine if you have enough money after your down payment to purchase the home that you want.

This is the first step to getting your financing in place. Build a strong relationship with your lender. Communication is important at all points during the home buying process — from prequalification to financing and through closing.

A loan officer can help you find a lender that offers loans in which you may qualify for and identify programs that offer payment assistance if needed (e.g., a program paying your mortgage payment while you are out of work for up to 12 months).

During the loan process, the lender will submit an application for your loan with an organization called an underwriter.

The underwriter reviews and approves or disapproves the loan based on what is stated in the application, as well as other factors such as the credit score of the borrower or co-borrower (if applicable), and other personal information such as employment status, income, debt payments, and outstanding loans.

You may decide to go with conventional financing or opt for a government loan program if you are a first-time homebuyer.

The process can be lengthy, but it can also be very rewarding.

  1. Find out what is required by federal, state, and local government agencies that relate to financing in buying your house (i.e., building permit or certificate of occupancy) before setting out to buy a home.

It is recommended to check with your city or county government regarding building permits and property taxes.

  1. Research the neighborhoods in which you are interested to determine if they have good schools and how stable the area is (i.e., crime rate, local employment scene).

Instead of focusing on a single house, it is a good idea to consider the entire neighborhood. This is especially crucial for buyers moving to a new metropolitan region, as they will be unfamiliar with the local environment and lifestyle.

It is critical to choose the most attractive regions of town, taking into account factors like as distance from employment and local shopping choices.

Social amenities, cultural offers, and public transportation are other aspects that may be important to you as well.

  1. Hire professional inspectors that will give you an unbiased evaluation of all aspects of your home before purchase.

Get an inspection, termite inspection, and appraisal before the sale of your home is complete.

If you plan on making major alterations to the home, find out what permits are required and who you can talk to about them.

You can also find a reputable real estate agent that is familiar with properties in the area where you want to buy a home.

  1. Be prepared to walk away from the deal if it is not what you want or there are issues that cannot be resolved, in other words, be reasonable but do not go overboard.
  2. Get a lawyer to review all papers before signing them to make sure they are all in order, especially if the seller is giving you any warranties about the home.

Be sure to get all your paperwork together such as the offer sheet, mortgage application, and proof of down payment. Read all of the documents thoroughly before you sign on the dotted line. Make sure you understand everything included in the paperwork and then ask someone if there’s anything.

The above is just some of the steps to take when buying a home as there are many more that can be added depending on your circumstances.

Important Things to Keep in Mind When Buying Home

Regardless of how experienced you may or may not be when it comes to buying a home, here are some important things to keep in mind:

  1. Do not overextend yourself financially when purchasing a home. Buying a house is one of the biggest and most important investments of your life, so be careful not to purchase a home that is too expensive

While this may seem like common sense, it is an easy mistake to make.  So much so that many financial experts believe it is one of the primary reasons for foreclosure in today’s economy.

  1. Do not get caught up in the emotion of wanting to buy a home when you are already committed to another home. This can make compromising on price impossible and cause negotiations to fail.
  2. It is crucial that you have a solid plan if you are buying your first house because these things should definitely be considered:
  3. What type of loan will work best for you (i.e., fixed rate, adjustable or variable)?
  4. What mortgage lender do you want to go with and what are their payment options?
  5. Do you know if the home you want will need a lot of work to make it your own? If so, how much will that cost? Where will you find the money to pay for the repairs and updates?
  6. When are you expecting your payments to be taken out automatically from your bank account? Do you want them withdrawn weekly, bi-weekly or monthly?
  7. Will you be investing in a home warranty plan to protect your investment in case of major breakdowns and repairs?
  8. Is the home you want currently owned by a private party or will it be going to foreclosure?

The above list is just a handful of things to consider when buying your first house, but it should give you an idea of the important factors that are involved. With enough research and preparation, you can buy a first home with confidence.

 

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