If you’re thinking about – or are in the process of – buying your first house, then this is an exciting time: but it can also be a daunting one as you negotiate the process for the very first time.
You may find yourself unsure of how a reverse mortgage works or the first steps that need to be taken to make your dream of buying your own home come true. Understanding the process, however, can help to manage things so that you can make a clear schedule of what must be done and when.
There are lots of elements to consider and sort out: from figuring out the amount of down payment you’ll need to arranging home inspections concerning potential properties; it can be hard knowing where to start. Use the handy step-by-step guide that follows to start getting organized and to help find your way through the tangle.
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Save a Down Payment
Ideally, you’ll need to save 20% of the property’s value to avoid fees. However, if this isn’t possible, don’t worry; there are other options. There are mortgages available that can be taken out with a 5 or 10% deposit – some types of mortgages, such as VA or USDA loans, even offer a 0% down payment option.
In the current climate, saving up for a down payment may be especially challenging. If you are finding this to be the case, then it’s worth having a look at government programs that could help, such as the HUD program.
As part of the budgeting process, don’t forget to take into account the cost of taking out a home warranty on your new home; you can find a list of home warranty companies here. Protecting your property’s major systems and appliances means that there will be no need to worry about a nasty, unexpected bill hampering your first few weeks in your new house.
Get Pre-Approved for a Mortgage
Once you’ve got your down payment in place, the next stage of the process is to get pre-approved for a mortgage. To do this, you’ll need to meet with a loan officer – ideally at several different banks, to make sure you get the best deal for your circumstances possible.
As part of this meeting, the loan officer will assess your financial situation and let you know the value of the mortgage that could be offered to you and the associated monthly repayments. Armed with this information, you’re all set to look for properties within your price range.
Choose a Real Estate Agent
A buyer’s agent will help you to find the right property, negotiate along the way as required, and explain all parts of the process as you go along. Apart from it, you can also find a new way to search from homes from eXp Realty.
The services of a buyer’s agent are free to first-time buyers, as the seller pays the sales commission.
Search for Your New Home
With the help of your agent, you’re now ready to begin the hunt for your perfect property!
To prevent the sheer number of options from becoming overwhelming, it’s a good idea to make a list of must-have features. Like going through apartments for rent in anaheim ca to help you narrow down the choices. If you find a serious contender or two, then the next step is asking your buyer’s agent to arrange for you to visit.
Make an Offer!
Once you’ve found your dream home, it’s time to make an offer! This can be done via your agent, who can also negotiate on your behalf regarding any elements of the sale – as well as price; this could also include, for example, making a deal about leaving certain items of furniture behind that you’d ideally like included in the sale.
Arrange a Home Inspection and a Home Appraisal
The next step in the process is arranging a home inspection and a home appraisal. The first is about having an expert visit the property you’ve made an offer on to check it over for major problems, such as faulty foundations or the presence of asbestos. Basically, this inspection is to look for serious issues that could mean you need to rethink moving forward with the purchase.
The home appraisal involves your lender assessing the property to make sure it represents a good investment. Your buyer’s agent can help with any questions you have regarding these checks.
Prepare for the Closing Process
Closing can also be known as settlement or escrow and is a process that brings together the buyer, seller, mortgage representative, and any other parties involved in the transaction.
The closing day is the day that you’ll be handed the keys to your new home and make the required payments to all the parties necessary. These payments will include your down payment, any charges attached to the loan, and closing costs. Closing costs average between 2 – 7% of the property’s price, so include this figure in your budgeting.
Move into Your New Property!
And now, the process of buying is complete; all that’s left to do is move in and enjoy your new property! Although purchasing a property for the first time may seem an insurmountable task, by breaking it down into stages to work through, it can be easily managed.
Start by getting really clear on your budget and thinking – realistically – about the type of home you want and the features it’s essential it has. And don’t forget to factor into your budget the cost of a bottle of champagne to pop as you head into your new home for the very first time!
Chris Evan was born in Quebec and raised in Montreal, except for the time when he moved back to Quebec and attended high school there. He studied History and Literature at the University of Toronto. He began writing after obsessing over books.