Becoming a homeowner is an exciting yet scary time in a person’s life. When deciding to buy a home using a Realtor and a lender is your first smart choice. Below are eight steps to take to when purchasing a home.
Step 1 Approach Homebuying With Confidence
Being prepared will help you along the journey. Understanding the mortgage process is very important. Both your lender and Realtor can help you with this journey but it is also good to have a good grasp of the mortgage process and requirements. Understanding your credit score and maintaining a good financial standing is important. Turn to a lender for advice on how to qualify for a mortgage.
Step 2 Save For A Down Payment
Data shows that in high-cost counties, it can take as long as 35.5 years to save for a 20% downpayment. Not all loans require a 20% downpayment. In fact, the average down payment for first-time homebuyers is 7%. Your mortgage lender can introduce you to low-down-payment options as well as your Realtor who can also help you find additional sources for assistance on down payment.
Step 3 Get Pre-Approved / Pre-Qualified
It is said that only 9% of renters who are looking to purchase a home get pre-qualified. Getting a pre-approval letter can let a seller know that you are a serious buyer. Getting pre-qualified will also allow a buyer to have a clear understanding of how much home they can afford. Realtor’s encourage pre-approval before a buyer starts their home search. This saves time and headaches during the homebuying process.
Step 4 Establish A Price Range
It is important to base your search on what you afford. Involving a lender to dive into your financial aspect will help you get down to a more concrete price range. A mortgage lender can help you through the process by identifying and explaining different housing types and mortgage types. Realtors can also shed light on all the costs associated with homeownership. Many first home buyers may not think about some of the underlying costs such as closing costs and home maintenance.
Step 5 Investigate Neighborhoods, Home Styles and Communities
According to the Joint Center For Housing Studies Of Harvard University, almost 80% of America’s housing stock is 20 plus years old. Many believe that older homes have a lot of charm. Sometimes purchase an older dated home is more affordable. A homeowner can come in a design their space. Your lender can educate you on financing options for renovations and improvements.
Step 6 Explore Available Homes
Currently, the housing market has low home inventory and new construction is having a hard time keeping up with the buyers’ demands. The housing inventory is at the lowest level in four decades. Buyers have a leg up in the market if they use a local sales agent who knows the market.
Step 7 Finance Your Mortgage
Buyers need to have all their ducks in a row in order for the mortgage process to run as smoothly and quickly as possible. You will want to collect your pay stubs, W-2s and tax returns, bank accounts, investment accounts, additional sources of income and all your financial obligations. Your lender can help ensure you have all your requirements met.
Step 8 Sustain Responsible Homeownership
A buyer should have a little savings in reserve. There will always be unexpected expenses and emergencies. A buyer should educate themselves on how to create a saving plan and have a clear understanding of their monthly income vs. expenses. A lender can help you with this by educating you about refinancing opportunities, home equity and other resources. Realtors can also give you pointers and valuable resources.
Remember homeownership is a long-term responsibility and with the help of professionals, it can be easily obtained.
