How much can I afford? Once you have decided to purchase a home, whether it is your first, second, or even fifth, you should determine how much of a mortgage payment you can afford a month. Start by analyzing your current monthly expenses. How much are you spending a month? How much excess cash do you have per month?
From there, you can determine the amount that you would feel comfortable with paying towards a mortgage per month.
Doing your homework and shopping for a loan can ultimately save you money. Interview different lenders to determine what their costs are as well as what interest rates they are offering. Remember- negotiate to get the best deal possible. Once you have selected a loan officer, you will want to complete a loan application and get pre-approved. A pre-approval for a mortgage means that you have completed the loan application process, and have a written commitment from the lender to loan you money up to a certain amount.
Being pre-approved for a mortgage gives you an advantage when making an offer. This lets the sellers know that you have financing in place and that you are serious about moving forward with the transaction.
To ensure a smooth, painless home buying process, it is highly recommended that you hire a real estate agent to help you find the perfect home. Purchasing real estate comprises of several individuals, whose actions can streamline the process and help make it go smooth.
Interviewing several agents can help you find the one that is a great match for you. Prepare questions that you would like answers to, and chose the agent who you think can do the best job for you.
When you decide to begin your home search, you want to make sure that you have a good idea of what you are looking for. Carefully assess your wants and needs for both the short-term and long term. Ask yourself, “will this be important in the next 5 years?”
Creating a “wish list” will help you to identify all of the items that you feel are most important. This will also provide your real estate agent with a clear vision of what you are looking for. Your Realtor can easily curtail your search to only include homes that you may be interested in.
Download A Wishlist Sheet: PDF | Excel File
You made your wish list, you went and looked at several homes, and you finally found the one! Now it is time to make an offer.
A purchase agreement is a written proposal stating what you are willing to pay for the home, when the closing date will be, and other important terms that will be included in the contract the buyer and seller need to agree upon.
Terms that are included in the Purchase Agreement are:
A home inspection report will provide you with a qualified inspectors report on a properties overall condition. The report generally includes an evaluation of both the structure and mechanical systems.
The purpose of a home inspection is to determine if there are any major issues with the property. If something significant shows up in the report, it is highly recommended to contact a specialist regarding the issue. You can then either ask the homeowner to fix the problem, agree upon a solution to fix the problem, or you have the opportunity to walk away from the purchase and continue your search.
The termite inspection is coordinated by the company that is listing the house and is paid for by the Seller. If termites are found, the seller and the buyer determine who will cover the cost of the treatment.
An appraisal is an estimate of the property’s value. Your lender will require an appraisal of the property that you are purchasing. They want to make sure that the property can sell for the amount that they are letting you borrow.
The appraisal report is very detailed and contains the following:
If the property appraises lower than the sale price, the loan may not be approved. However, there are various options in handling the matter:
The final walk through of the home typically occurs 24 hours before closing. The final inspection gives you the opportunity to make sure that the sellers have completed all repairs agreed to in the purchase agreement. You can also make sure that all included items in the purchase agreement are left behind in the home, and to verify that the sellers have moved out.
Once you have finished signing the legal documents at closing, the keys to your new home are all yours! You can now go decorate and make the place your own.