62% of Americans own their own home.
Stable costs, greater equity, and privacy are only a few of the benefits of owning your own home.
If you are embarking on the exciting journey of homeownership, get ready for an exciting ride. From open houses to key exchanges, here is what to expect during the home buying process.
- Money Matters
Before buying a home, you will need to make sure you are financially prepared to make an offer. Check out this first time buyers guide for more information.
In most cases, you will want to have a 20% downpayment saved. A downpayment of less than that amount will usually result in your paying mortgage insurance in addition to your mortgage.
Most homeowners would like to see a pre-approval or pre-qualification before an offer gets made.
A pre-qualification is an assessment of the type of mortgage you would likely qualify for. It gets based upon an interview between you and the lender.
You will get asked about your income, assets, and debt. The lender will assess how much money you can expect to borrow.
A pre-qualification can happen over the phone or online, and may only take one to three business days. It does not involve any review of your documents or credit history. A pre-qualification does, however, give you an advantage in making an offer that other prospective buyers may not have.
Homeowners will be even more pleased if you have a loan pre-approval. This is a conditional commitment by the lender to give you the mortgage.
To get pre-approved, you will need to submit documentation verifying your income. Your credit rating will get checked, along with any other loans you have.
When getting pre-approved, you can get a good idea of the type of loan you will qualify for. You may even be able to lock in an interest rate. You may get charged for a pre-approval.
- Choose An Agent
You can choose an agent by asking friends and family for a recommendation, but be sure that they have a proven track record of success. Your agent should have an in-depth knowledge of the housing prices in your area.
Be sure that your agent has good negotiating skills, as well as a solid idea of the type of home you are looking for. Remember, a buyer’s agent won’t cost you anything until you decide to buy a home.
Your agent should be patient, trustworthy, and flexible. If you feel uncomfortable discussing your needs and concerns, it is probably time to get a new agent.
- Decide On The Type of Home You Are Looking For
You will want to narrow your search down to the exact type of home you are looking for. There may be a particular layout that will suit your needs best in terms of bedrooms, bathrooms, and living space. Decide on a price range and don’t look at anything way out of your budget.
Be sure to look at structures and features before deciding on anything.
- Make An Offer
Once you find a home priced right in your neighborhood of choice, you are ready to make an offer. Be sure that it is a number the seller’s agent will be willing to work with.
Have your agent negotiate for you, and be patient while you work on a price that everyone likes. Find out about everything that will come with the house, including appliances, fixtures, and furnishings. If there is damage that will need to get mitigated, be sure that gets worked into your price.
- Get A Home Inspection
A certified home inspector will take a look at the home you are about to purchase and give an honest assessment.
Your real estate agent should be able to schedule an inspection within a few days after your offer is accepted. It will give you a chance to renegotiate or withdraw your offer.
You may want to ask your seller to fix something before closing the sale. Before the closing, you will be able to do a walk-through to make sure it has gotten fixed.
Leaky roofs, insect damage, or other structural damage or good reasons to negotiate your offer. Make sure you hire a licensed inspector with a good reputation.
- Get A Loan
Work with your mortgage lender to decide upon a loan that will work for you. Today, most mortgages are 30-year-fixed-rate. This means that your home will get paid off in 30 years, and your interest rate will stay the same for the duration of your loan.
You can also get your home appraised by an independent third party, who will make sure that you are paying a fair price.
- Go To Closing
At closing, the deal will get completed. Be prepared to sign a lot of paperwork.
Both the property and title of ownership will transfer to you. You will pay whatever closing costs you owe. Your real estate agent will receive their commission.
Before closing, you will also need to get homeowners insurance. Many lenders require this before making a loan.
The closing agent will register your new deed with the appropriate government office. You will then get the key to your new home!
The Home Buying Process
The home buying process can be tricky. With the research and real estate agent, you will find the house of your dreams and move in quickly.
For more information on home-buying, read our blog today. We have more advice that you can use to get the home of your dreams.