Buying a house is a big investment and for the first time buyer it can be stressful. Because buying a house includes more than just touring houses. Before buying a house you have to keep a lot of things in your mind.
After all of this let’s move towards the steps to buy your first house-
1) Credit score– Your credit score plays an important role. When you decide to buy a home for yourself. Because your credit score shows the lender your ability to pay off the debt.
The higher credit score means the lower interest rate you will receive. Moreover, it also depends on what type of loan you are getting.
2) Basic things you keep in your mind before starting the process of buying a house-
1) What do you want?
2) Where do you want to go?
3) What are your requirements?
– What do you want?
There are many type of houses . And you should decide what type of house you want like a condos, Town house, mobile house, one and half storey, two storey. So first decide what kind of house you need?
– Where do you want to go?
As we said buying a house is a big investment and you are spending your life savings to buy a house. so you should also decide what type of surroundings you want.
Like- You want a house near a bus stop, a school or near a park area. So you should select what type of area you want?
– What are your requirements?
This is also very person to person like what extra he or she wants in their house.
3) Get a pre- approval– After knowing your credit score your lender should approve you for pre-approval. Which means you are qualified for a certain amount on the basis of your current financial situation or credit score.
– A pre- approval helps you to know how much you can borrow.
– It is very important because it also help seller to know that you are serious to buy.
Moreover, you can also visit multiple lenders to compare the interest rate, fee at the time of opening the mortgage.
4) Find a real estate agent- Having a well educated real estate agent is very important. As a GPS in our mobile helps us to get directions and help to reach a certain destination easily. Similarly a good real estate agent helps you to reach your required house easily and for first time home buyers it is very important to have a good real- estate agent.
Where a real estate agent can help –
– A real estate agent helps you to know about the market. For example – what is happening, what type of new development is arriving, and an overall view.
– Secondly. they also know where to negotiate for price, what is the actual price of a specific house.
– Third, they help us to know about the property we selected like about the surrounding, facilities, etc.
-At last they help us with paperwork and also recommend us to the best lender for a loan.
5) Start house hunting – To get a house according to your requirements you have to go through lots of houses. In this, searching online is the best way to find a house and you can easily filter with price and your requirements.
After hunting houses online you can start visiting the house in person where you know about the physical health of that house. Moreover, an inspection team can help to know about all important aspects deeply.
Like – Water, electricity, roof, insulation, strength, noise from outside and many more.
6) Make an offer- When you find a house according to your requirement then you should make an offer based on the market value of that house.
Earnest money – It is an amount of money you are paying to show that you are serious about buying that house. Which later becomes part of your down payment when you are closing the deal.
7) Inspection- Well, most of the buyers use a home inspection. When they are close to the deal because this helps them to know about the home condition. And it also helps to know if there is any malfunction in the house.
In case you find any major problem in the inspection report you can discuss it with the seller. So you can also start negotiations again. Moreover, you can also demand to fix that particular problem or also get a discount to fix it later.
8) Financing- After sorting all steps of home inspection and setting price you need to approve your purchase from the lender you decide. Despite you having a pre-approved form.
Appraisal – An appraisal helps the lender to know the actual price of property on the basis of recent sales and market trends.
If your Appraisal is higher than your offer price means you are getting your deal at a lower price than that of the market. However, the lower Appraisal means you are overpaying for that property. Furthermore you can try another Appraisal or re- negotiation the price.
9) Homeowner insurance policy- This is important to have before closing, if you own a home already then you can take the help of that owner to open a new one or if it’s your first then you can try in the market for a new one for you.
10) Close and move- It depends on you when you decide to move into a new house. Moreover, on the closing day you have to sign documents and also provide the closing funds. It can be 3-5 % of the sale.
After signing the documents, that movement is yours, enjoy!
Disclaimer- The all steps mentioned above are based on our own research and experience. These can be different or depend on individual cases. So please check with officials beforehand.
