Owning a home is one of the biggest investments that a person can make. A home is likely the biggest financial decision that a person will make in their life and it can significantly affect their future. If you are looking to purchase your first home, there are many things that you need to know. Here are the top things that all home buyers need to do before buying their home.
Pre-Approval
The first step that all new home buyers need to take before purchasing their home is to get a pre-approval letter. To get this letter you need to find a mortgage lender that is willing to lend you the money needed to get a home (assuming that you are not going to pay cash for a house). The lender will often be your banking institution or another lender recommended by your real estate agent. You can shop around with different lenders to find one that is going to offer you the lowest interest rate. Try not to get hard credit checks more than twice because it could reduce your credit score.
Inspection
The inspection of your potential new home is something that all mortgage lenders will likely require. To get the inspection you will need to hire a licensed inspector to walk through the home. They will look at all aspects of the house from your laundry room faucet to electrical panels to window locks to plumbing issues and more. They will write a report of any issues they find and you can present it to the sellers and ask that they fix the issues. This will help ensure that your home is safe and ready to move in.
Home Search Within Your Budget
Almost every home will gradually increase in value over time, which makes owning a home a great investment. While it is likely a guarantee to make money, it is also crucial that you stick to purchasing a home that is within your budget. If you try to stretch yourself thin and buy a home that is at the top of your budget, you may not be able to afford repairs and emergencies. Your mortgage lender will give you a budget that you should stick to and it is important that you stay within that range and even shop at the low end of it to ensure that you can afford your house even during uncertain times.
Offer Letter
When you find a home that you are interested in purchasing, you will need to submit an offer letter. This letter will go to the sellers and include the price you are willing to offer and all other specifications that you are asking for. Your real estate agent will write the letter and send it on your behalf. You can typically expect an answer within 48 hours telling you whether or not the sellers have accepted, rejected, or countered your offer.
Appraisal
The appraisal will take place once the offer has been accepted by both you and the sellers. Your mortgage lender will send one of their representatives to the home to further inspect the house and determine its value. Oftentimes, the appraiser will value the home near or at the offered price. If the appraiser does not value the home for as much as the offer, there will likely need to be some negotiations between the buyer and the seller about the price of the home. Your real estate agent will work with you to make sure that you get the best possible deal if the appraiser does not value it at the offered price.
Once you have finished all of the above-mentioned steps, you are likely ready to own your first home. The necessary steps for purchasing your first home move very quickly and can cause a great deal of stress in your life. While the month or so of buying a home will be chaotic and frustrating, you can often rest easy knowing that owning a home is a great investment that will pay off in the long run. It is important that you do not rush the process when looking for a home but also crucial that you meet all deadlines set to ensure that you get the home you want.
