What To Expect Buyers Guide
Are you having thoughts of buying a home? Owning a home gives you that sense of residential security. It is something that a person in his/her right mind will give priority when planning for future with respect to the present scenario. So, maybe you are at this phase but do not know where to start. If yes, you are at the right place to have a helping hand. Alternatively, you can use this article for future reference when you have plans to buy a home.
Buying a home can be straightforward and hassle-free if you know what to keep in mind and look for when going about home shopping. Here are the things you need to keep in mind when going to buy a home.
Do your homework
Would you have confidence in paying for something you know nothing about? Before investing your money into a home, you need to know about it. Refer websites and newspapers to know about the current market scenario. IS it currently considered a buyer’s market or a seller’s market? Keep notes of the house listings and track alterations in market prices. Additionally, you can also join forums and discussions with other homeowners and educate yourself with some additional housing insights.
Set up your budget
Doing research will let you know many aspects of buying homes, including what you can afford and what you cannot. Though everyone has an idea about the perfect home, when you include the factor of financial capability, things can turn out to be different. It’s never a good idea to overspend, especially with ever-rising rates. You could risk losing the house later. So, set out a budget to buy a home. A reasonable monthly mortgage (including your monthly premium, interest, property tax, insurance, and/or HOA fees) should not be more than 28% of your monthly gross income.
Get preapproval for loans/mortgage
If you can arrange financing the full cost of the house on your own, then that’s amazing and you can skip ahead to the next step. However, most individuals do not have the luxury, and turn towards loans/mortgages to finance a home purchase. So, the next step involves getting preapproval for a home loan. You will have to submit your financial records to the lender so that they can verify your ability to repay the loan. After verification, the lender will provide an estimated amount they are willing to borrow. This amount may even be over your 28% allowance. Just because a lender is willing to allow you to borrow above 28% of your income does not mean you have to buy a home in that price range and it is financial wise to not do so.
Find the right real estate agent
Finding homes can be a daunting task, especially if you don’t know the neighbourhood as is the case with most of the first-time buyers. A real estate agent will come in handy in these situations. Real estate agents are profoundly acquainted with homes and the neighbourhood of your preference. Hence, they will provide you with valuable information about the houses and the region and leverage your negotiations with the seller.
Shop for homes and make some offers
Now you are all set for house hunting. Being equipped with the knowledge and necessary tools, you can start looking for homes in your preferred locations and budget. It is the time to check out houses and shortlist the ones you like. Work out the doors and windows, test the plumbing, assess the room spaces. Also, evaluate the surroundings and nearby places like schools, shopping, and distance to work to ensure they meet your liking and convenience. Remembering all the house designs and layouts is not easy, so it’s a good time to put your photography skill to work. Click pictures of your favourite ones. It will help you later in the day when you are settled in your couch and are in the process of making decisions. Once set on a house, negotiate with the seller for a fair offer working together with the real estate agent. After this, the house goes into escrow, meaning the remaining steps of the home buying process begins.
Get the house inspected
Further, you will have to get the house inspected. A home inspection is necessary to reveal structural damages which will need addressing prior to purchasing the home. For minor damages you could consult the seller and renegotiate the deal, asking for repairs. Alternatively, inspecting the house acts as a safety net to pull out of the deal if you find out significant structural damages. So, make sure you examine the house aptly before finalising the ownership.
Work with a lender and select a loan plan
Here comes the financing part. The market has several lenders with various loan options. The kind of loan you want will depend on the factors you are working with. To buy a home, someone might like a short-term loan with higher instalments. Alternatively, people with mid to low income may prefer the standard 30-year term with more affordable monthly payments. Assess all loan options you qualify for, and factoring the conditions, go for the loan that best suits your priorities.
Getting home appraisal done
Home appraisal means evaluating the actual worth of home that you are buying. The lender arranges an evaluation which is done by a third-party company. The final report is presented to all the parties involved and tells if the listing price is a fair representation of its value.
Coordinate the paperwork
At this stage, you mostly have to deal with paperwork. Your realtor and mortgage lender will help arrange the paperwork involved in owning a home. Be sure to read and verify every document that is involved in the process.
Close the deal
This is the final step of the home buying process. After arranging and verifying all the details, you will have to put your signature on the appropriate documents to acknowledge and complete the purchase. Once duly filled and signed, the records go to the lender for approval of the loan. After the loan approval, funds are transferred to the seller and you become a homeowner.