Buying a home can be one of the more complex and difficult processes for new home buyers, if they are unprepared. Many potential new homeowners find that they are unprepared for the homebuying process. Buying a house unprepared can be a difficult and emotional process. Fortunately, we’ve decided to lay out how the home buying process works so that you can have a good idea of what to expect.
Preparing To Buy A House
Buying a house takes a lot of preparation beforehand to set yourself up for success and any surprises that might come along the way. Listed below are two things to consider to help prepare you for buying a house.
Commitment
When buying a house, you have to consider that this new home is likely the place you will be staying at for a decent period of time. This requires you to make sure you are 100% committed to buying the home right now. Do you foresee yourself possibly moving in the near future? Are you thinking about starting a family? Who are you buying with? These questions can help you determine if you are committed to buying a house at the moment.
Finances
Buying a home requires that you are in the best place, financially speaking, to buy a home. This means you ,and if you are buying it with someone, must be financially ready to contribute to the home buying process. Take into account the location of the home, your credit score, your income vs debt, and your down payment. You can calculate what your finances might look like to see if you are making the right decision with the home.
Process of Buying A House
Once you are confident and prepared to begin the home buying process, then you can begin. Here are the steps to buying a home.
- Put together a list of what you must-have for your home. Things like the location, whether it’s new or used, a backyard, suburbs, and so forth are good things to consider putting down on a list to help narrow down your options.
- Determine what type of mortgage you need. There are different loan options available for people looking to buy a home. For more information regarding the type of loans available, visit this link.
- Get pre-approved for a mortgage loan with a lender. Now that you have determined what type of mortgage loan you will need, the next step is to get pre-approved with a lender. With a pre-approval, you are telling lenders that you are a serious home buyer, which is a big advantage.
- Work with a real estate agent. With your pre approval and your list of the home you’d like, now you are ready to work with a real estate agent. The best real estate agent will negotiate, be knowledgeable, and provide positive support during the home buying process.
- Shop for a home and make an offer. Now that you have the confidence you need, begin shopping around for the right home. Check out some listings and be sure to complete a walk-through of them to ensure they are up to your expectations. Take pictures for reference to compare with other options. If you’ve identified the home for you and you know it’s the one you want, then make an offer. From there, the seller will either accept or reject your offer. This is where your real estate agent can be of great help in negotiating for the price that you want and one that the seller will accept.
- Obtain a mortgage and get home insurance. Once you’ve made an offer that the seller accepts, now is the time to get a mortgage, which also usually requires having homeowners insurance. Choosing a lender requires a mortgage application, which you can complete with a loan officer. The reason you need homeowner’s insurance though is that most lenders will only give you the mortgage if you have homeowner’s insurance.
- Perform a home inspection and make sure the house is appraised. A home inspection is crucial as it can help you find certain things that the seller failed to disclose. This can give you some ammo to help negotiate a different price. Also, be sure to have the home appraised to avoid the lender sending you more money than the actual value of the home. During this step, the lender will decide who will conduct the appraisal, and you will be the one who pays for it.
- Close on the home. Once you’ve completed all of the aforementioned steps, now you can look forward to closing on your home! Your lender should provide you with a closing disclosure at least 3 days before closing. With your real estate agent, you will perform a final walk-through of the home to ensure any repairs and items that need to be there are taken care of. Be sure everything’s as agreed upon.
The home buying process may be long, but with the right preparation, you can feel confident throughout the process. This can make sure that you choose the right home at the right price for you.
This content is for informational purposes only and may not apply to all situations.
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