Buying your own home is both a milestone purchase and a financially beneficial decision. In addition to having your own roof over your head, you can also save yourself from paying massive rent for someone else’s property. In turn, you become a homeowner with a significant asset to your name.
But purchasing your very first home is easier said than done. With several requirements to fulfill, you have to go through an array of processes. If you are not careful, a single misstep can cause significant delays in owning the home of your dreams.
To assist you through these challenging aspects, here’s a step by step breakdown of the process to buy a home.
Before you move forward with buying a home, it is critical that you take an account of your current finances. This includes your monthly income, expenses, savings, and total funds in reserve. Besides helping you determine how much home you can afford, this also helps you with breaking down monthly mortgage payments and down payment.
This step is necessary if you – like most people – plan to buy your home through a mortgage. But even if you want to purchase your home with cash, taking an assessment of your finances is quite critical and lets you determine your overall affordability.
If you decide that a mortgage is a better option, you should move forward with looking for lenders in your area. From traditional banks to VA lenders in California, you have a plethora of choices at your disposal. Here, you should compare factors such as offered mortgage rates, closing costs, and other expenses. You can get these estimates by contacting these lenders.
After you have made your choice to work with a lender, you will get a preapproval letter. This is a tentative approval that shows real estate agents and sellers that you are serious in your offering. You can then download a real estate app to find home listings or real estate agents.
Once you have your pre approval letter in hand, you have multiple ways to move forward with your home hunting process. The first approach is to find listings online and then contact relevant real estate agents. The other method is to reach out to a real estate agent and let them show you different listings.
Both approaches have different benefits when buying your first family home. Finding online listings gives you maximum flexibility and time to shortlist different homes. But asking real estate agents for advice lets you narrow down your search. You can make a decision based upon how pedantic or convenient you want your home searching process to be in the first place.
Whether you want your home to be decorated with antique sets or detailed bedroom furniture, it’s important that you find the right structure and style of property first. When that happens, make sure that you don’t wait around before making an offer through your real estate agent. Otherwise, someone else might snag the listing if it fits their search profile.
Your initial offer depends on a variety of prerequisites such as a home inspection. This lets you steer clear of committing to a home with noticeable problems in it. While you should make your offer keeping your budget in mind, make sure not to lowball too much.
The final step is to close on your chosen listing and move forward with the legal processes. Hiring a real estate attorney can help in various processes. The expense of real estate lawyers is covered within the closing costs, which are about 3 to 5 percent of your total loan amount.
You will also see your escrow kicking in during this time, which means that your payment funds are being held by a third-party until all conditions are met. After all requirements are fulfilled by the seller as well as you, the payment is released to the seller and you become the owner of the home.
By keeping these tips in mind, you can make your way through buying your own home in quite an easy manner. If you need any help, don’t hesitate to consult your lender or real estate agent. This makes sure that you are moving forward with an informed approach.
This is a contributed post and therefore may not reflect the views and opinions of this blog or its author.