Buying a home is a major deal. For some, they consider this a sign of adulthood. However, it is not always an easy thing to decide on. Owning a home is a big commitment. A lot of people own homes but their finances are all over the place.
With that said, we have put together a list of tips and home buying guide.
- Determine Your Budget and How Much House You Can Afford
Before looking through listings and becoming emotionally attached to your beautiful dream house, you have to make sure that you check your monthly budget first so you can determine how much house you can afford. This way, you can stick to looking at houses within your budget and not wasting unnecessary time to houses you can’t afford.
- Prepare your Down Payment
If you are unable to pay for the total price of the house you want, then at least save for a down payment of 20%. Saving at least 20% will prevent you from having to pay for private mortgage insurance. The best recommendation to get is a 15-year, fixed-rate conventional mortgage with a 20% down payment. Getting this program creates a higher monthly payment but you get to pay your mortgage off half the time, with a lower interest!
- Don’t Forget About Closing Costs
Apart from your down payment, you’ll also need to pay for closing costs. Closing costs are fees paid at closing and usually a total 2%–5% of the final sale price. Your lender usually lets you know how much it is exactly so you know what to bring on your closing day.
- Compare Mortgage Rates & Get Preapproved for a Loan
Make sure that before you decide, compare rates of at least three lenders. This can help you save thousands of dollars. Once you get the most promising rate, you can work on getting preapproved for a Loan. Having a preapproval letter in hand shows sellers that you are a serious buyer and is also one way to get ahead.
- Find a Home for Sale in your Budget
You can either look for homes online and send them to your agent so they can have a grasp of what you are aiming for or you can ask them to show you listings available in the area of your choice. Make sure to not base your decision on the house alone, this is also a good time to start researching neighborhoods that are best for your price range and also for your personality or your family’s needs.
- Make An Offer
Once you are preapproved for a loan, you are ready to make an offer. If you are a first time buyer, the expertise of your real estate agent may come in handy at this point. Ask help and make sure your offer is competitive but also make sure you are sticking to your budget.
- Prepare for Closing
Once a seller accepts your offer, closing process will commence. The process of closing or what you call “escrow” usually takes around 30 to 45 days. A lot of documents will be sent your way so make sure you find time to read all of them and making sure to ask help from your agent if there’s anything that’s unclear to you.
- Get your keys and Start Moving In
Prepare your bags and start packing for your new home!
We have created a separate blog about Moving. Click HERE.