Buying a home is an exciting time. However, it is a long-term commitment that you need to take seriously. Knowing what to expect during the homebuying process can help you avoid disappointment along the way and successfully find the home of your dreams.
💯 Know Your Credit Score
The first thing you should do before beginning the search for a new home is to know your credit score. Your credit score will tell you where you stand financially. Lenders will check your credit score to determine if you are financially responsible. If you know that your credit score needs to be raised, you can take the steps necessary to do that before you begin home shopping. You may find that there are errors on your credit report that need to be corrected. Simply disputing such items can get them removed and result in a higher credit score. Keep in mind that a higher credit score will mean more favorable home mortgage loan terms.
💰 The Importance of Saving Money
The importance of saving money before you make a home purchase cannot be overstated. It is possible you will need cash up front when buying a home. Depending on the type of loan you obtain, you could be required to make a down payment of three to 20 percent. Therefore, the down payment will depend on the purchase price of the home. Although some closing costs can be rolled into your mortgage loan, you will be required to pay some costs out-of-pocket. Some of these costs might include:
- Appraisal fees
- Survey fees
- Inspection fees
- Attorney fees
There are other closing costs that you may be required to pay. When you apply for a loan, your lender will give you a Good Faith Estimate which lists all the closing costs and amounts for which you’ll be responsible.
🙋♂️ Find the Right Real Estate Agent
The real estate agent you choose is going to be with you throughout the home buying process. Therefore, it is imperative you choose someone with whom you are comfortable. You want to work with someone who has a proven reputation and years of experience in the real estate industry. Your real estate agent will negotiate with prospective sellers on your behalf so it’s important to choose someone who has your financial and personal interests in mind.
📝 Get Pre-Approved for a Home Mortgage Loan
Before you start looking at homes, you must get pre-approved for a home mortgage loan. Skipping this step will ultimately lead to disappointment. If you have no idea how much money you’ll be able to borrow for a home, you’re probably going to be looking at homes that are out of your price range. There’s no greater disappointment than finding a home you absolutely love, only to find you can’t get the loan. So, save yourself the heartache and get pre-approved. This will to allow you to only look at homes that you know you will be able to afford.
💲 Placing the Right Offer
Once you find a home that meets your standards, it’s time to make an offer. Your real estate agent will be a great help in formulating the right offer. If the housing market in your area is slow, you can probably get away with placing an offer lower than the listing price. However, if there are many buyers in the market, you want to ensure your offer is competitive. If you’re offer is too low, the seller may just move on to a higher offer which means you lose the house.
📅 What Happens After Offer is Accepted
Once your offer has been accepted, the seller’s attorney will draft a purchase contract. That contract will be sent to your attorney. This would be the time when you would add any conditions, such as home repairs, that you require to the contract. Next, your lender will require an appraisal. If the home doesn’t appraise for at least the selling price, you will go back to negotiating. If the home does appraise, you will then get a home inspection. If problems are found during the inspection, you will negotiate with the buyer to address those concerns. If no problems are found, you will proceed to closing.
Becoming a new homeowner can be challenging but is rewarding. Although you might be stressed about the long-term commitment you just made, you can begin making the home your very own by adding your own personal touches. You can also take pride in knowing that you’ve made an investment that will build value as time goes on.
Your real estate agent is the best source of information about the local community and real estate topics. Give Chris Kostopoulos Group a call today at 617-751-4111 or email him at Chris@Isellmass.com at to learn more about local areas, discuss selling a house, or tour available homes for sale.