Seven Steps to Buying Your First Home
If you’re a first-time home-buyer, closing the deal on your new house can seem daunting. However, try not to let your emotions get ahead of you or cause you to jump into buying a home before you’re truly ready. Buying a home is easier than you think, which is why My Financial Zen presents the following seven steps, making it easy to find your perfect home in no time!
Saving for the Down Payment of Your Home
Buying a home starts long before you look at the market. It might be more fun to go shopping than to think about your finances, but having a solid savings plan in place and getting ready for the down payment comes before the purchase. As you save for a down payment, make a point to get a realistic idea of what you can really afford in your first home. An online mortgage calculator can help, but remember that today’s interest rates will likely be different from the rates you see when you apply for a home loan.
Also, when saving for your down payment, be sure to add extra money to cover moving expenses as well as costs associated with closing on your home.
Apply for a Home Loan
When you’ve saved for the down payment, visit your bank or lender to get preapproved for a mortgage. This will show you how much you’re able to invest in your new home, and it will also make your offer stronger when you find the perfect house. If you’re worried about your interest rate or the amount of your monthly mortgage payment, you have options. The first thing you should do is shop around. Different lenders may offer you different rates and types of loans. Also, My Financial Zen recommends checking your Financial Health Score (FiQ) to look for areas where you can begin improving your credit. By having a higher credit score, you can often find loans with much lower interest rates.
Hire the Right Real Estate Agent
You may enjoy looking at listings online, but trust the experts when it comes to finding your dream home. Your real estate agent will know the market, as well as the local communities, schools, and amenities. They’ll also make sure you’re seeing homes that will allow you to live the lifestyle you want.
Look at Homes
House hunting is easily the most exciting step of the process, and you may spend a fair amount of time checking out potential homes. However, make sure you have a clear list of what you’re looking for and the area where you want to live. When viewing homes, don’t get carried away with excitement; instead, check the general condition of the house and stay within your budget.
Think about the day to day experience you want to enjoy in your home and community. Pay attention to noise-levels, walkability, conveniences, parking and green spaces. Go for a walk around the area to get a sense of what it has to offer. You might even consider checking out some of the local stores and restaurants for a first-hand experience.
Placing an Offer
Did you find your dream home? The next step is to make an offer. With your mortgage pre-approval, you’re more likely to have your offer accepted, so sit down with your real estate agent and make a great offer. You don’t want your offer to be too high or too low, and you need to be prepared for a bidding war with other buyers. Make your offer even more appealing by having a flexible closing date and setting straightforward terms. Remember that both you and the seller want the same thing, and together you can find a solution where everyone is happy.
Have a Home Inspection
After making an offer, you’ll need to get a professional home inspection. Having a home inspection is an important precaution, and it will give you an accurate picture of the state of the home. You won’t get caught off guard by any damage or structural issues down the road, and you won’t get stuck with an expensive repair. If the home inspection reveals any glaring issues, you and the seller can renegotiate the price — or you can walk away altogether.
Closing the Deal!
Once the offer has been accepted, you’ve completed the home inspection, and all parties are satisfied — all that stands between you and your new home is some paperwork. You’ll need to sign the closing documents, pay property tax and homeowners association fees, and get insurance. After all the paperwork is in place, you’re ready to move into your new home!
If you’re looking to buy your first home, follow this seven-step process from saving for your down payment to closing on your dream house. Before you know it, you’ll have the keys to your new home in hand!
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Guest post by Amos Faulkner –
Amos Faulkner wants to help people “do money well.” Money is a constant in our lives. Yet, as a bank teller, Amos realized that many people don’t pay enough attention to how much they have or how much they need, now and in the future. Well, now, the buck stops with his site, domoneywell.com. From teaching your children how to manage their money to saving for your golden years, Amos will cover it all.