Deciding to buy your first home is a monumental milestone. Before you embark upon this remarkable achievement, there are a few things that you need to consider as a first-time home buyer.
Before attempting to purchase a home, your credit should be in great shape. The fund you’ll be borrowing are substantial, and you want to be in a good place financially. If you have negative items on your credit report, take care of them before you begin the home buying process. This will save you time when you apply for a home mortgage loan.
You’ll want to place enough in savings to cover the down payment and any additional costs associated with buying a house. This includes closing costs. It’s better to have more in savings than you need rather than get caught short.
Once you have your credit looking healthy and you’ve saved a suitable sum of money, it’s time to seek a pre-approval for a home mortgage loan. Being pre-approved is important for several reasons. This pre-approval will help you know exactly how much home you can afford. This will save you time when it comes to searching available homes for sale. The pre-approval will look good when you place an offer on a house, and it may be the deciding factor when it comes to a bidding war of multiple offers on the table.
A home loan may be fixed rate or variable rate. A fixed rate loan means that the interest and payments will not change over time. With a variable rate, your payment could change over time. Consider the life of a typical home mortgage loan is anywhere from ten years to thirty years. This depends on the terms of the loan and may have an impact of your monthly mortgage payment.
Find a real estate agent that works well with first-time home buyers and understand exactly what kind of home you’re looking to buy. If you are looking for a waterfront home, you will want a real estate agent with knowledge and experience in that field. You should have a good rapport with your real estate agent and be able to communicate clearly. This is important during the home buying process. Having a real estate agent with strong negotiation skills is a plus.
There may be multiple offers on the table for the house you choose. Keep this in mind and try not to be emotionally attached to the house at this point. If your real estate agent tells you that there is competition for the house, don’t be surprised if negotiations begin right away. You may have to increase your offer or walk away and find another house. Listen to your real estate agent’s advice as you navigate this part of the process.
Once your offer is accepted, you’ll need to make a good-faith deposit. This is a non-refundable deposit to the broker or attorney, and this is not paid directly to the seller. The house will be appraised to make sure that it’s worth the amount that is being asked by the seller.
There will be multiple inspections to make sure everything is as it should be with the house and property. Be prepared in case one of the inspections comes back with unpleasant news. This could be anything from a leaking roof to bad plumbing. There is no need to be alarmed. This just means that the contract may need to be re-negotiated to include repairs. You will have an opportunity to remove yourself from the contract if you feel that you aren’t prepared to deal with what the inspectors find during their inspections.
The seller may include a home warranty with the property that protects themselves and your interests in the sale of the house. This is purchased from a home warranty company and includes provisions for needed repairs to be made at reduced rates by pre-selected, qualified contractors.
The final piece of the home buying process is the closing. This is where the title changes hands and you take possession of the house, as the new owner. This is when you’ll pay the down payment required and any closing costs.
Want to know more about the home buying process? Call the Bogle Realty Group at 909-762-5861.