10 Steps towards buying your home
I work together with the best experts in the field of Mortgage Loan, you will find the skill, professionalism, and consideration they give to each of my personal clients. It makes getting your loan a successful endeavor. Once you have an idea of the type and the size home you want and the area you’d like to live in, you need to pre-qualify. By doing this before you begin searching for a home, you will save yourself time, energy, and unnecessary stress.
Benefits of one-on-one consultation with the loan officer:
- Determines your purchasing power: the pre-qualification helps you evaluate your current financial situation and determine the price range for the future home.
- Determines what your potential monthly payments may be: you will receive the estimate of your monthly Principal, Interest, Taxes, and Insurance (PITI).
- Identifies loan programs that may fit your needs: with the wide variety of loan programs available, it is important to know which types might and suit your needs.
- Strengthens your offer: sellers are more inclined to accept realistic offers when they know that you have already been pre-qualified.
- Determines alternatives and strategies: your lender can help you determine the strategy you may need to buy the home of your dreams. Some examples include:
- Special first-time homebuyer program, which have low down payment requirements and sometimes a lower market rate.
- Debt consolidation direction– by restructuring your debts, you may be able to afford more home and end up lower total monthly payments.
In order to become Pre-Qualified, the Lender will need to know the following:
- Your Income
- Your monthly debts and obligations
- Housing expenses
- Your total Assets
- Social Security Number
What to bring to Loan Pre-Qualification Consultation Link Receive Pre-Qualification Letter and start shopping: when you are pre-qualified, you will receive the Loan Pre-Qualification Letter. I usually use the Letter to present with the Offer. The Seller may be more likely to accept your contract because they know you are a serious Buyer. It is time to start shopping!
At Pink Pearl Real Estate, we try to make home buying easy and informative. You'll find that our web site is filled with articles and resources to keep you motivated and well-informed. Below are 10 steps to think about when buying your next (or first) home:
Step 1: Make an informed decision to buy
Buying a house takes time. And no house—not even that perfect bungalow with the fenced-in backyard for your dog —is worth jumping into before you’re ready. Start this process by making a "pros and cons" in relationship to buying versus renting. What are the benefits of home ownership and what is it that you truly want that you don't have now?
Step 2: Create your "must haves" list
Think about how you want to live your life and the needs of you and/or your family. Do you want to live in walking distance to the ocean? Near shopping districts? Near work? If you have school-age children, you'll want to select a community that has schools that meet your criteria. Make a list of your "must haves" regarding the location as well as the actual home structure. How many bedrooms must you have? What style of home do you prefer? Are there features that are absolute necessities? Once you have your "must haves" regarding what and where you want to live - prioritize the items on your list. Great job - you're well on your way to finding your dream home.
Step 3: Evaluate the state of your finances
Take a realistic look at your finances. Do you have a consistent income and are you setting aside cash for a substantial down payment? Although not always required, you'll find yourself in a better position should you have the fund available for a down payment. Next, take a look at your debt-to-income ratio. Most mortgate lenders generally require a debt ratio of 36% or less. Some government loans allow a debt to income ratio that goes up to 43%, but most conventional lenders agree that 36% is the highest debt ratio a consumer should have.
Step 4: Start preparing to buy
Just like any goal, buying a home the smart way takes planning and preparation. The most time-consuming task is saving for the down payment, closing costs and other moving expenses. Are your finances in a solid position or do you need time to prepare? This is where pre-approval from a qualified lender can also come in handy. A lender can help you determine where you need to remove a little debt; do some credit repair; or direct you how to accumulate a little savings. Set a plan and focus on your milestones and you’ll have that down payment before you know it.
Step 5: Find the right buying agent/partner
Finding the right partners - whether it be your buying agent or lender, is an important step in the home buying process. Your buying agent will help you navigate through the home-buying process. In some cases, even help you find a house before it hits the market, giving you a competitive edge. And when it comes to making an offer, your agent will negotiate on your behalf so you don’t pay a penny more than you have to. You can utilize your buying agent's web site to search for homes (our site is free and lets you input your own criteria), and will set up an automatic search that will send you emails with homes that meet your criteria. Either way, the right partner should make this process stress-free, even fun. Plus, beginning your search now can serve as a great motivating factor in securing that down-payment.
Step 6: Go house-hunting!
Once you reach this step, your finances should be rock solid and you'll know exactly what you can afford. And with the right partner by your side, you have a winning combo for buying a home with confidence! Before you dive into the home search, pull out that list of "must-haves". Once you have clarity on the features you want, share the list with your real estate agent and use those criteria as the foundation of your home search. Let the house-hunting begin!
Step 7: Make an offer
Once you’ve found the right home, it’s time to make an offer. That means submitting an offer and signing a contract agreement with the seller. Your real estate agent will work with you to submit a solid offer. If you end up in a bidding war, things like being preapproved with your lender and having a flexible closing date can help make your offer appealing. Your good real estate agent will give you advice about when to give in and when to hold firm.
Step 8: Submit the contract and negotiate details
It's critical that all the details of the sale are spelled out in a contract that is binding to both the buyer and the seller. The contract/offer ( free sample contract) is usually followed by some negotiations. Most often found in older homes, there are some repairs that will be necessary and you can negotiate to have some made before you move in. Ordering a home inspection is part of the process. What should you expect? Your main task now is to work through the contingencies in the contract. Negotiations are best left up to professionals. Sometimes agreeing on terms is quick and painless, but it can also be one of the hardest parts of the process.
Step 9: Closing
Once the negotiations are completed, a search for the Title is required. You can choose a Title company or a legal firm to accomplish this step for you. Then, you have one more sprint ahead of you: paperwork. That’s right! Bring on the hand cramps! If there are any confusing terms or conditions as you work through the paperwork, don’t be shy about asking questions. This is one of the biggest purchases you’ll ever make, and you should know exactly what you’re signing up for. Having your trusted guide by your side is invaluable at this stage.
Step 10: Moving in
Right after closing day, you'll do one final walk-through to ensure that everything agreed upon is as it should be. If everything is in place, it’s time to breathe a sigh of relief. You’re officially a homeowner! Congratulations - you've just completed the 10 steps to your new home.
Pink Pearl Real Estate has been helping individuals and families find their perfect "pearl of a home" for over 10 years. We'd love the opportunity to meet you and help you during this exciting journey!