Buying a home is one of the most eventful times of your life. It involves a great deal of research, vigilance, and planning to purchase a place that is both likable and affordable. If you are thinking about buying a new house, following the steps will help make your search and decision-making a lot easier.
When you decide you are going to be buying a home, first and foremost, you need to take your credit report into account. This is because you most likely will need to get a mortgage. In order to ensure that you qualify to apply for a mortgage, your credit history must be in good standing. Your mortgage banker will then analyze your income, savings and investments to check the amount that you will be approved to purchase your new home.
Once you know how much mortgage you qualify for, you need to decide how much you are willing to spend. In other words, even if you can get a larger mortgage it does not necessarily mean you should use the whole loan amount. You need to take into account other monthly/yearly expenses and future plans while making such decisions. It is always better to not burden yourself with heavy mortgages.
When you have a fair idea about your budget, you can start out your search by getting in touch with a real estate agent. The importance of a reliable estate agent cannot be overstated. It is their knowledge, experience, and skills that will lead you to making the best possible deal. And you don’t have to worry about their charges either as they are usually compensated from the commission that is paid by the house seller.
Together with your real estate agent, start touring the houses the price range of which fall within your budget. You must have a check-list of the must-haves and deal-breakers when visiting houses. Also, remember to take notes, pictures and videos so that you can analyze, compare and discuss later as well. Don’t overlook the details of the house such as electrical system, plumbing, security and facilities of the area etc. It is likely that by touring numerous houses you will discover some new things to like or dislike which will further refine your search.
After you have found a suitable house, the next step is to work with your agent to craft an offer. This is where the real estate agent’s market knowledge, comparative analysis of homes in the neighborhood and negotiation skills come into play. You make the most attractive offer, contingent on a home inspection and then wait to get a response from the seller.
If there is a positive response from the seller of the house, be sure to have a home inspector look over the house to ensure there are no unseen defects that you may have overlooked. The findings of the inspection report are delivered to you after a comprehensive search of the property. Based on this, you can renegotiate or even withdraw the deal. You can also ask the seller to fix certain defects before signing the sale contract. Besides a home inspector, it is recommended to have different trade groups such as electricians and plumbers come in and check for any defects in the systems. They can provide additional useful information about the condition of the installations.
There are a wide range of loan programs offered by lenders. An experienced mortgage banker will guide you in selecting your mortgage plan based on your priorities. Factors such as whether or not you want to make minimal monthly payments or how soon you may want to move into a new house are taken into consideration when choosing a mortgage plan.
An appraisal is arranged to provide an independent estimate of the house being bought. The appraisal is conducted by a third party hired by the lender. The purpose is for the bank to determine that they have not overinvested and they are not putting up more money than the house is worth.
Inform your insurance agent about your new home. A lender would require homeowners insurance. Even if you don’t opt for mortgage, insurance is a crucial part of protecting your property/investment. You will also provide your move-in date to utility companies so that services such as power, gas and water are established and working in time for when you move in.
When all the paperwork is complete and you’ve signed on the dotted line, you will get the keys to your new house. Once you do, don’t forget the minor post-closing tasks such as changing locks, meeting neighbors, changing address with United States Postal Service and informing your employers and other important people about your new address.