Buying a home is an exciting and scary process. Even so, by doing your homework and finding the right professionals to help, you can buy a home with minimal hassle and stress. Here’s how:
Get Your Financial House in Order
The best way to know your financial situation is go over your budget and order a free copy of your credit report. Your budget will help you get an idea of how much you can afford in a monthly mortgage payment.
Federal law now allows you to get a copy of your credit report for free once a year. You can order yours at Annual Credit Report. When you receive your report, go through it carefully checking for errors that can hurt your credit rating. If you see problems, you can notify the credit reporting agencies and ask for an investigation. The Federal Trade Commission has information on how to deal with credit report problems.
Get Pre-Approval for a Mortgage Loan
Online mortgage calculators can give you an idea of how much house you can afford, but most Realtors prefer to work with home buyers who have met with a mortgage lender that has pre-approved them for a set amount. This saves everyone, including you, time and hassle. There’s no sense in looking at a home that you can’t afford. A mortgage professional will take your financial information and run a credit report to calculate your pre-approved mortgage loan amount. Be sure to let the lender know if you’re disputing items on your credit report.
Decide What You Want In Your New Home
Make a wish list of your home that includes the location you want it to be in and all the features you want it to have. How many bedrooms and baths? Do you want a single-level home or two-story home? Do you want a fixer-upper or move-in ready home? Does your ideal home have a garage and/or basement? How many acres does it sit on? As you make your list, prioritize what’s most important to you. In most cases, you won’t find the perfect home, but you’ll find one that meets most of your wants and needs.
Find a Realtor
Your real estate agent can locate and show you homes that meet your needs, but that’s not all. Your agent can let you know how much similar homes in the area sold for so you can know what the current market values are. She can negotiate terms such as price, closing dates, updates, closing costs and more.
Get a Home Inspection
A home inspection will cost a few hundred dollars, but could save you thousands or more if there is something wrong with the home. Your offer to buy will include terms about when a home inspection needs to be done by and when any request for fixes need to be delivered to the seller. This is another area that can be negotiated. You can ask the seller to make repairs, but he can refuse, at which point you can decided to proceed with the sale, renegotiate terms (i.e. price) or get out of the deal.
Take Your Contract to Your Lender
Once a seller has accepted your offer, you’re ready to apply for a mortgage. Your mortgage lender will help you apply and give you all the details about closing costs. Be sure to supply all the paperwork such as employment payment stubs to your lender so that your loan can be processed in a timely manner.
Close On Your Home
You can choose a lawyer or closing company to help you close on your home purchase. The closing agent will pull all the details of the sale together and at closing you’ll go in (or the closing agent will visit you) and you’ll sign more papers than you’ve ever signed before. At the end of the closing, you’ll receive keys and be the owner of a new home.