Purchasing a home is an important decision, especially for a first time home buyer who doesn't have the knowledge and experience in buying real estate. Our goal is to educate you and provide you with the tools and information so you can determine if homeownership is right for you. Buying a home is a process and essentially involves six steps:
So you want to buy a home then you need to ask yourself these questions:
Whatever you decide, keep yourself informed and ask a lot of questions. Also, pay attention to your feelings and trust your instincts. If real estate in your area is moving fast and you feel pressured to buy, you may want to wait.
Explore first time buyer programs which have the best features and down payment options to meet your financial needs. Also, you should check out the home affordability calculator to determine your maximum price range for your new home.
Currently, the real estate market is competitive and sellers are looking for pre-approved buyers. You begin the pre-approval process by submitting an online application and providing FirstHomeBuyers with 30 days consecutive paystubs, complete tax returns with W2 forms, last 60 days bank statements, and a copy of your driver's license. Usually, you will find out if you are pre-approved for one or more programs within 24 hours and you will receive a pre-approval letter to start your home search.
"Expect less, be prepared for anything," is what a Samurai Warrior might say about buying a home. A home does not always live up to their advertisements, but you may find a real charmer without many listed features. First you must find a real estate agent who fits your personality and makes you feel comfortable. Also, you will neeed to let your Realtor know your priorities, such as price, location, size, number of bedrooms, etc. Next, get a house hunting checklist to compare and contrast properties or download House Hunter APP for IPhone or IPad. A beautiful Victorian may be a favorite until you check out your notes later and discover it needs a new roof or siding. Also, you need to check out condo buyer report if you want to buy a condo. When you find a home, research the neighborhood. Talk to neighbors and find out what it's like to live there. You may want to park on the street and just observe activity and listen. If everything checks out then you are ready to make an offer.
Step back from your emotions. You need to know the facts such as the current real estate market which is a seller's market, recent prices of comparable homes sold in the area, and the seller's motivation to sell such as divorce or job relocation to help you and your Realtor determine what price you should offer for a home. Once you come up with a number then your Realtor will submit an offer with your conditions such as seller paid closing costs and closing date which coincides with the expiration of your lease on your apartement. Usually, you will have to include a small deposit with your offer to apply as a good faith down payment to hold the home. The seller may accept, reject, or counter your offer. If the seller accepts, it is a done deal. If seller rejects, don't take it personally, look elsewhere, and you will find the perfect home. If the seller counters, you can accept or counter the counter offer. I strongly advise that you hire an attorney on your first home purchase because there are many legal forms and details that need to be addressed concerning your specific real estate transaction.
You need to contact the lender once you have a contract and provide them with a copy of the purchase contract. You will need to get the Loan Documents Checklist to gather all the documents and information to process your application and obtain final loan approval. Also, you will need to lock in the interest rate or wait to lock later but you may end up with a higher rate since rates are starting to move up. Are you a gambler? Once all verifications and processing of your loan is complete then your loan is submitted to underwriting for approal. Once your loan is approved then there are usually a few more conditions to clear before getting final loan approval and "Clear To Close" on your new home.
Usually, it takes 30 to 60 days to close on a typical real estate transaction. Three business days prior to closing you must receive a Closing Disclosure form which outlines the final costs of your loan and funds needed to close. Also, a lender is required to give you a Loan Estimate within three days of applying for a mortgage loan. You need to go over these costs with your loan officer to make you sure you understand each one. Next, you will do a final walk-through to make sure there hasn't been any changes in the condtion of the home and that the seller has completed any repairs specified in the contract. The moment of truth has arrived and you sign the mortgage papers, get the keys, and hang your hat on home sweet home.