How to Buy the Right Home for the Right Price
So you think you’re ready to own a home? Here are a few steps to get you ready.
First let’s figure out how much you are willing to spend. The key word here is budget. It’s best to buy something you can afford rather than living paycheck to paycheck just so you can afford those mortgage payments.
When preparing for purchasing your new home you should think of the following
- Credit Score: Make sure you have your credit score in order. After all, your credit score determines your interest rate.
- Income: Can you afford to make the big leap into home ownership?
- Other Debts: Car payments, insurance, utilities, food, and etc. All of these subtract your income. Make sure that after all of these are paid for that you can still afford a mortgage payment.
- Closing costs and lawyers fees: Sometimes these fees can be quite a bit, depending on the seller.
- Down Payment: Most banks require not only a down payment but a minimum percentage of the cost of the house.
Your next step is to get pre-qualified. By getting pre-qualified it helps you know what kind of interest you would pay and lets you and your agent know exactly what you can afford. By getting pre-qualified you’re not getting left in the dark or jumping into something blindly; also by doing so, you are making sure you are not wasting the realtor’s time. The less time that’s wasted in the search for your home the better, right? You can go to any banks website and pre-qualify. There is no documentation necessary. You can get pre-qualified from the comfort of your home.
Pre-approval certificate is another way to go and sometimes a better way to go. It is a good way of showing your ability to purchase a home. They are considered better because it takes more financial documentation to get one. Such as pay stubs, W-2 or 1099 tax forms, bank statements, and a credit check.
Make a List. Think of all the things you want in a house. How many bedrooms and bathrooms you require. Do you want an office, a den, a separate dining room, a basement, an attic? Do you want a garage and if so how many cars to fit in? Do you want a back deck, a pool, a front porch? This list is a great help to your agent, it shows them exactly what you are in the market for.
Now you are ready to start the search for your new home. There are many ways of doing this. You can always leave it up to the agent to do all the looking or you can join in. There are tons of websites geared to help the average consumer find a home in an area they choose to look.
Next thing to do once you’ve found the home is make an offer. Most sellers are willing to negotiate the price; it’s not always set in stone. If your offer is accepted and they decide to sell to you get an inspection. No point in biting off more than you can chew. Get a list of what is to be included in the sale from the sellers.
Remember when making an offer it isn’t always accepted, they could counter offer. Just remember the deal isn’t set in stone until both you and the sell sign the appropriate paperwork.
Lock in your interest rate. You wouldn’t want it to go up. This is only temporary. The interest rate lock will only last for a month or so, can be up to 40 days.
The last step is closing the sale. At this point the house will be appraised. Once the home goes into escrow the house is yours.
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