Fall is fast approaching, and the real estate market is still very active. A dream home is likely the biggest purchase you'll ever make, so it's important to go into the process with your eyes wide open.
These are some steps and a guide for first-time homebuyers on how to purchase an affordable home.
Step 1: Make sure you're ready to buy a home
The first step when buying a home. Think about your long-term goals and how they will be affected by buying a house.
Step 2: Find the Right Real Estate Market (Home Search)
You need assistance with buying your first home. There are different types of real estate markets and each one has its characteristics. You can consider Homeowners insurance, mortgage insurance, house loan assistance, and many more.
Step 3: How to shop for a home? Establish a housing budget.
To buy your first home, it is important to have a budget. Few things you should include in your budget:
The kind of house you want, including its size, location, and any unique characteristics.
Your budget is the sum of money you have set up for a property purchase. Consider a buying house loan.
Your monthly outgoings, which comprise your utilities, insurance, property taxes, and mortgage payment.
Step 4: Choose the best mortgage type for you.
Prospective homeowners can choose between fixed-rate, adjustable-rate, or hybrid mortgages. You need to check what is the right mortgage for you.
For those who intend to live in their home for an extended period, a fixed-rate mortgage is the best choice. You may plan your finances properly because the interest rate on a fixed-rate mortgage won't alter throughout the loan.
An adjustable-rate mortgage is a great option for people who only plan to reside in the home temporarily but may decide to switch to a fixed-rate mortgage in the future.
For those who desire some interest rate stability but also the flexibility to convert to a fixed-rate mortgage at any time, a hybrid mortgage is a suitable choice. With hybrid mortgages, the interest rate is often initially fixed and subsequently subject to adjustment.
Step 5: Get a mortgage pre-approval.
When buying a home, getting pre-approved for a mortgage can help you save time and money. Pre-approval can help you get a better bargain on your house and can be completed in a matter of minutes. For pre-approval, you don't have to be a homeowner.
Step 6: Start your house search (House Hunting)
Use your wish list when searching for homes on the MLS. Tour properties to get a feel for what you're looking for. Don't be afraid to set boundaries.
When working with a real estate agent, make sure to ask them questions about the properties you're looking at. Determine whether the property is in a flood zone, the crime rate in the area, and the property taxes. Inquire about any special assessments that may be imposed on the property.
Step 8: Make an offer
First, ensure that your offer is appealing to the seller. This includes offering a reasonable earnest money deposit and offering a fair price for the home based on its market value. You should also include any important contingencies, such as a home inspection or appraisal contingency.
Following your initial offer, the seller may counteroffer with their terms. If this occurs, you have the option of accepting or rejecting the counteroffer. If you accept, you'll sign a purchase agreement. If you reject, you can proceed to the next property.
Step 9: Obtain a home inspection
A home inspection is a critical step in the home-buying process. It can help identify problems that may need to be repaired in the future and give you an idea of what repairs may be required. The inspection can cover various aspects of the house, such as the foundation and roof. You should select and pay for the home inspection.
Step 10: Arrange for repairs and credits.
Before you start negotiating, you should know what you want and what you can afford. You must also check your credit score and select a lender. You can make an offer on a home after you've found a real estate agent and begun the home-search process. If the sellers accept your offer, a home inspection and appraisal will be performed. Following that, you'll need to get homeowners insurance and perform a final walkthrough. Finally, you'll seal the deal on your new home.
Step 11: Obtain financing
It is critical to secure your financing ahead of time when purchasing a low-cost home. This means you'll need to find a lender and get pre-approved for a mortgage before you start looking for a home. Once you've found a home you want to buy, you'll need to make an offer and get a home inspection and appraisal.
Step 12: Conduct a final walkthrough.
For starters, it allows you to ensure that all of the repairs that were supposed to be completed have been completed. If there are any unresolved issues, now is the time to address them.
Second, it allows you to inspect your home for any pests that may have moved in since your last visit.
Finally, this is your last chance to ensure that all of the systems in the house are operational.
Step 13: Close on your home
Closing is the final step in the home-buying process. This is the point at which all of the paperwork is completed and you are given the keys to your new home.
A closing disclosure must be provided to the lender before closing. This document outlines all of the expenses related to purchasing the home. Examine it thoroughly to ensure that all fees and terms are correct. You will meet with the escrow agent and sign all necessary paperwork. Check that you understand everything you're signing. You'll also need to wire money for closing costs, property taxes, HOA fees, and home insurance.
Get help from Lakeview Mortgage Bankers for your purchasing your first new home.