Walking Seamlessly Through the Key Steps to Buying a House
As the U.S. economy continues to improve, there are still many great deals in the market place for home purchasers. And, for those who qualify, it is also quite likely that you will be able to obtain a low rate on mortgage financing.
According to an industry group report, most home buyers said their purchase was a good investment. Yet, while it can be fun and exciting to search for the home of your dreams, there are some key steps to buying a house. Also, these are definitive steps that home buyers should take before they obtain the key to their new front door.
Checking the Financials
Although there may be many homes today that are priced below their true value, it will still be necessary for most home buyers to obtain a mortgage in order to finance some – or in many cases, most – of the purchase price.
A good place to start is to determine exactly how much you can afford, as well as how likely you will be to obtain the funding that you need. Here, checking your credit report and score is essential.
Credit scores typically range between a low of 300 to a high of 850. The higher your score, the better. This is because high credit scores are representative of paying your bills on time and not being over extended in debt.
By law, you are allowed to obtain one free copy of your credit report each year. When reading over your report, check to make sure that all information is correct and up to date. If you do find any errors, report them to the appropriate credit bureau for updating.
In determining how much home you can afford, there are numerous online calculators whereby you can plug in figures that pertain to debt and income. While you may or may not need to provide a down payment of 20 percent today, it is important to set aside some funds for the purpose of closing costs and other mortgage related expenses.
It may also be a good idea to get pre-approved for a home loan. This way, you will have an accurate figure in mind as to how much money you can borrow, and likewise, a price range for the home you will be looking for.
Search for a Home
Now comes the fun part. When looking for your new home, remember to search for those that will best fit your needs. One way to ensure that you will succeed here is to make a list of all of the home attributes you are seeking.
For example, how many bedrooms and bathrooms will you (and your family) require? What about style – is a one-story ranch home ideal or would a two-story home be more preferable? In addition to the physical features of your potential new dwelling, you should also be sure that the surrounding area is where you want to be.
In this case, should the home be near shopping, churches, parks, and other places that you may need to frequent? What about nearby schools or places of employment? In addition, if you often utilize public transportation, you may want to ensure that your new home is near a bus line or train station.
Make an Offer
Once you have found a great home that is in your price range, it will be time to make an offer. If you are working with a real estate agent, he or she can help you with this process. Typically, the offer process will include stating the price that you will pay for the property, as well as when you would like to close the deal and occupy the home.
Your purchase offer may also include any other amenities that you would like included. For example, oftentimes sellers will be willing to leave you large appliances such as a refrigerator or washer & dryer in return for a higher price.
The home offer process can sometimes take several days – or more – as there could be a fair amount of back-and-forth negotiation. With this in mind, don’t get discouraged if the seller doesn’t accept your initial offer.
Obtain a Mortgage
Once you and the seller have agreed on a price and closing date, it is time to obtain a mortgage (unless you will be paying cash for the home). Here, it is important that you understand the different types of loans that are available.
A fixed rate mortgage, for instance, will keep the same interest rate throughout the life of the loan because the interest rate remains the same. These can be advantageous for those who wish to have an exact amount of payment throughout the total life of the loan.
On the other hand, an adjustable rate mortgage will have an interest rate that can move up or down over time. While this means that your monthly payment may not be the same amount from year to year, it can also mean that your payment amount could go down in the future, depending on the interest rate environment in the market.
Close on Your New Home
Once you have obtained your mortgage financing, you will be ready to close and take possession of your new home and move in. At that point, it will be time to settle in and relax! Welcome home!
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