A Few Tips for Buying Your New Home!
Step 1: Start Your Research Early
Start as soon as you can! Start reading websites, newspapers, and various social media platforms that have real estate listings. Take note of particular homes which interest you, see how long they stay on the market as well as any changes in asking prices as this will give you a sense of the various trends happening in specific areas.
Step 2: Determine How Much House You Can Afford
Generally, lenders recommend that individuals search for homes that cost no more than three to five times their annual household income. This is dependent on how much of a down payment that you will be planning to make as well as your other debt obligations. The above calculation is generally based on a 20% down payment and a moderate amount of other debt.
Again, this information is relative and will not fit everyone’s situation – your determination should be constructed to fit your personal financial situation. It is important to know the various tools available to you for this purpose! Contact your financial institution for various tools that you can use to figure out how much house you can afford.
Step 3: Get Prequalified for Your Mortgage
Prior to looking for a home, you should have an idea of how much you can realistically spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you would need to provide some financial information to your mortgage banker, such as your income and the amount of savings and investments you have. Your lender will then review this information and based on what you provide, tell you how much they are able lend you. This will give you a price range for what homes you should be looking at.
Step 4: Find the Right Real Estate Agent
Real estate agents are necessary partners when you’re buying or selling a home. Real estate agents can provide you with advantageous information on homes and neighborhoods that isn’t known or easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house. That kind of help at no cost proves to be very beneficial to the hassle of buying a home.
Step 5: Shop for Your Home!
Begin exploring options of homes in your price range. Taking notes will prove to be beneficial on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home.
Make sure to check out the little details of each house. For example:
- Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water
- Try the electrical system by turning switches on and off
- Open and close the windows and doors to see if they work properly
It’s also important to evaluate the neighborhood and make a note of things such as:
- Are the other homes on the block well maintained?
- How much traffic does the street get?
- Is there enough street parking for your family and visitors?
- Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?
Take as much time as you need to find the right home, the ones that speaks to you. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighbourhood. Once you and the seller have reached an agreement on a price, the house will go into escrow or the period of time it takes to complete all of the remaining steps in the home buying process.
Step 6: Work with a Mortgage Banker to Select Your Loan
Every home buyer has their own priorities when choosing a mortgage! Some persons are interested in keeping their monthly payments as low as possible, others, in making sure that their monthly payments never increase. The structure of your mortgage depends on your priorities and personal situations therefore, it is important that you work with a mortgage banker who understands and will help you choose something that best suites you!
Step 7: Have the Home Appraised
Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.
Step 8: Close the Sale
At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller, you are ready to move into your new home!
Valuable information from : Discover Bank – https://www.discover.com/home-loans/articles/10-steps-to-buying-a-home