Do you want to buy a new home? If so, then welcome to a world of brokers, realtors, property ads, insurance agents, lawyers, sellers, and contractors!
Is this too much for you? Purchasing property can be complicated and difficult, particularly if you are moving to another area or a different city altogether.
But there’s a method to the madness. If you stay organized and know what to do, it’s a challenge that may turn out to be one of the most memorable experiences of your life. So let’s see what you need to do to purchase a home in the most hassle-free way.
It’s surprising how many people set out to buy property without deciding on exactly what they want. This is the crucial first step. Without this, there’s no second step. You might be thinking, I know I want to buy a home. Isn’t that enough?
No it’s not. Have you decided on what kind of home do you want? What are your needs? How many rooms should it have? Creating an exact picture, in your brain, of the kind of house you want, makes it easier for you to narrow down your range of options.
And this leads us to… the budget. Know your means. Stay within those means. Calculate the amount of monthly mortgage payments you can afford.
Securing finance is probably the most crucial aspect of buying a home. And when you make a budget, you would know exactly what you want, when you apply for a loan.
If you want to buy a home, you need to do the homework. Grab your notebook and start on the research. For that, you’ll need to access the local newspapers, view property ads on the internet and visit several local real estate agents. You need to know the market. Otherwise, you would be clueless when you set out to physically search for properties. And that’s when the costly deals start seeming attractive.
It’s important to avoid any legal troubles that may come with buying a property. There are hundreds of formalities to take care of, tons of paperwork to deal with, and dozens of contracts to sign. Hiring the right lawyer early on in the process is although not a legal necessity, but it can make things really easy. Just take care not to go for the expensive one. You need to save money to buy a home, remember?
In order to apply for a loan, you usually need to go through a pre-qualification and a pre-approval process. How does that work? And is there a difference between these two? Pre-qualification is when you supply your financial details to the lender. These include your debt, income, and assets. After reviewing this information, the lender can provide an estimate of the mortgage amount you qualify for.
Does this mean you can secure the loan yet? Not exactly. You still need to get pre-approved for the loan. This is a more complicated process where the lenders examine your financial background and credit rating. When they’re done, you can know the specific mortgage amount and the interest rate you’ll receive. You can now continue on to the next step.
If you followed step three, finding the right real estate agent would be a piece of cake. Just make sure to get prequalified for a loan application before you approach an agent. Most realtors do not spend their valuable time or resources on people without verifying if they can afford to buy a home. You must be thorough in your search and find the one who can assist you the most in the next steps.
This is where things get exciting. Now you can actually embark on the search for a home. First, you decide the neighborhood. Then you visit different houses. Once the choice is made, you can work with your agent to negotiate the price. When you’re shopping for a home, it’s helpful to create a checklist which lists several features that you require. The ones that tick all the boxes are the perfect choices.
These are crucial steps which you cannot skip at any cost even through most people do. You will need to hire independent experts to inspect and appraise the home you want to buy. But it’s better to spend a little money to save more. The house inspectors will inform you about some of the damages or required repairs as well as signs for pests such as termite infestations.
Home appraisers, on the other hand, are members of a third-party company that independently assess the value of the house to see if you are getting a fair price.
This step demands some attention. Securing the loan is not a straight-forward process. You don’t just secure a loan, even if you can. Ideally, you must look for various loan programs that the lender offers. If you have no clue which one to choose, don’t worry. The lenders may assist you in selecting the programs that suit you best. You just need to know your preferences. Do you want to keep the monthly payments as low as possible? Are you interested in making sure these payments never increase? How much would the interest rate be? These preferences will help tailor your loan program according to your wishes.
This is the big one. Take a deep breath. If you have reached this far, then congratulations, you will be a home-owner soon. But not as soon as that. At least not before you complete the final paperwork and close the sale. We mentioned that there would be a lot of paperwork. Well, now is the time to deal with it. But you won’t do it alone. You’ll have assistance. Your lender will work with you to secure all the paperwork. When it’s done; then comes the tedious task of signing all the documents. But it’s better to involve your attorney before you sign. Then, once you receive the loan payment, you can hand over the check and receive the keys. It’s then time to move in.