No matter how much you may have researched the home buying process, there’s nothing like being in the thick of it to really understand what you need to do. Here’s a handy house hunting checklist of things to keep in mind when you’re house hunting, whether you’re a first-time buyer or not.
1. Financial Checkup
A financial checkup reviews your current financial situation to assess how well you’re managing them and whether you need to make any adjustments to keep on track.
Assume you already have a steady job; if not, find one and establish a track record of consistent salary. The lender must be satisfied that you will be able to make your monthly mortgage payments. To determine the type of mortgage you qualify for the bank mainly depends on credit scores and credit reports. External scores should not be relied upon credit checklist because they may not be accurate.
2. Set a Budget
A few important factors should be considered while determining your first home budget. First, think about how much cash you have set aside for a down payment. In general, home buyers should aim for a down payment of 20% of the purchase price, since this will allow them to avoid paying mortgage insurance on their mortgage payment.
After you’ve thought about your funds, think about your real income, job stability, credit score, and chosen lender. This information can then be entered into an online home loan calculator. This can help you determine a target price range for your first home by giving you a better picture of your monthly mortgage payment options.
3. Get pre-approved for a home loan mortgage
First, it is important to know what loan you should choose in buying your dream home.
There are a variety of mortgage loans available, including:
- Fixed-rate mortgages a set interest rate for the life of the loan. This can be helpful in budgeting for your monthly payments.
- Adjustable-rate mortgages offer a lower interest rate than fixed-rate mortgages, but the interest rate can change over time. This can be risky if the interest rate increases.
- FHA loans are offered by the Federal Housing Administration and are available to first-time home buyers. A home mortgage loan is given by a bank, mortgage company or other financial institution for the purchase of a primary or investment residence.They offer a lower down payment and relaxed credit requirements. Refinance mortgages replace your home loan with a new one.
- VA loans are available to veterans and active duty military members. They offer low interest rates and no down payment is required.
- USDA loans are available to buyers in rural areas. They offer 100% financing with no down payment required. Refinance credit cards is an umbrella term for ways to pay off the debt on high-interest credit cards faster and with less interest.
- Student loan is money borrowed from the government or a private lender in order to pay for college. When you avail student loan refinance, you lower your payments by consolidating your private or federal student obligation into a new loan with a lower rate.
- Auto Loan Refinancing loans auto refinance replaces your current vehicle loan with a new auto loan, one with a different payment like credit cards auto, interest rate or term.
Getting pre-approved for a mortgage is easy. You just need to provide some basic information to your lender. This includes your income, debts, and credit score. Your lender will then tell you how much money you are eligible to borrow. This will help you narrow down your search for a home.
It’s time to start meeting with lenders once you have a firm grasp on your financial condition and intended budget. To apply for a home loan refinance mortgages mortgage, you will normally need to produce statements and proof of income. Make sure you ask a lot of questions at this point to ensure you understand everything about the mortgage. Choose the right type of loans you need.
When meeting with lenders, don’t be hesitant to shop around. In reality, this will make the most effective strategy to ensure that you get the greatest mortgages mortgage rates refinance and loan mortgage terms. When you’ve found a lender you’re happy with, ask for a pre-approval letter so you may start looking at houses.
4. Time for house hunting
On your hunting checklist, begin by using online listing sites like Zillow or Redfin to seek for property listings in your desired neighborhoods and compare them. These can help you narrow down your search based on the features you want, as well as give you a better indication of how many houses are available in your region.
Making a checklist of what you want in a new home will help you immediately eliminate the ones that aren’t a good fit for you and need to focus on the ones that are.
This is also a perfect time to begin organizing your life. While you probably already have all of your financial paperwork in one place, keeping a list of properties you’re interested in is a good idea. You’ll save time and cash by being organized during the home purchasing process, and you’ll be better prepared to deal with an agent in the future.
5. Find a home real estate agent
Your house hunting checklist will also include hiring a real estate agent. An agent can provide important information, search up similar sales to evaluate if a house is worth the asking price and has been sitting unsold for a long time, assist you in preparing your offer and counteroffers, and work through any issues that may arise. If you’re new to the area, she can also recommend available properties in the best areas or school districts, and she may even have access to homes that haven’t yet been listed publicly.
Choose an agent with whom you wish to make work and start touring properties in your neighborhood. Keep in mind that an agent is there to assist you with any part of the home buying process. Their experience should help you in appointment scheduling, locating new listings, and finally negotiating the purchase of your first house.
6. Make an offer and negotiate
After your house hunting, it’s time to make an offer. Your pre-approval letter, the price you’re willing to pay, the offer’s expiration date, and any closing details you can give are normally included in an official offer. You will also make an earnest cash deposit, which is normally one to two percent of the home’s worth, to convince the seller that you are serious about the offer.
It is not always the case that the first offer you make will be accepted. It may take a few rounds of back-and-forth negotiations to obtain the property, and you may even lose it to another interested buyer. The most crucial piece of advice for surviving this stressful stage of the house purchasing process is to be patient and trust your real estate agent.
7. Prepare the needed documents
You’ll have to provide financial information to your lender at some time — a lot of financial documentation . The sooner you start collecting it, the better, but if you haven’t already done so by the time you start looking for a home, you should get started right away. Make a checklist!
When you are meeting with a lender, be prepared to provide documents such as pay stubs, bank statements, and W2s. This will help the lender determine if you are eligible for a mortgage.
By providing these documents, you can speed up the process of getting a mortgage. This will help you get the home loan that you need in a timely manner.
You’ll most likely be requested to provide the following documents:
- Income tax returns, for the last two years
- Pay stubs, for the last two years
- All bank statements, plus brokerage and investment account statements, for the last two years
- Proof of funds for down payment and closing
- Letter of recommendation (if you’ve been a renter)
- ID (preferably a driver’s license or passport)
8. Get a home inspection and appraisal
A home inspection should be undertaken prior to closing on any acquisition, and no contract should be signed without a contingency clause stating that the house must pass inspection. This will ensure that the house has no hidden structural or functional issues, as well as provide ammunition for any contingencies that must be included in the contract. The buyer is responsible for the inspection, and your agent can recommend a few trustworthy inspectors.
A home inspection may detect small issues such as electrical or plumbing water issues that can be quickly fixed, or more major issues such as mold or a damaged foundation. It’s up to you to decide if the flaws are serious enough to cancel the sale, demand that they be fixed before closing, or accept the sale “as is” and cover the repair costs yourself.
An inspection for termites and pests is also recommended. Termite colony’s nest is subterranean with a small portion above ground made of sand and clay materials. Some home inspectors also perform these services, or you may need to hire a separate exterminating company. The lender will also require an appraisal to guarantee that the home is worth the amount you agreed to pay for it, and will arrange for one to be completed.
9. Close the deal
The final paperwork and legal steps of purchasing a home are referred to as closing. During this stage of the transaction, you’ll most likely finish your home loan mortgage and purchase agreement, as well as make your down payment. Additional fees, such as administrative fees, inspection fees, or title transfer fees, may be incurred at this point. Before you get the keys to your first home, the previous owners typically have a move out schedule after you close on the property.
The closing procedure is often done in person, but in more than a dozen states, it is now possible to complete it online using a secure digital e-Signing service. If you have an attorney, they should be present at the closing to read all of the documents before you sign them, and if you are unable to attend in person, you can transfer your power of attorney to others.
It is important to read the mortgage contract carefully before signing. This will help you avoid any surprises down the road. By reading the contract, you can make sure that you understand all of the details of the home loan. You can also ask questions about anything that is unclear.
By signing the contract, you are agreeing to the terms and conditions of the loan. So it is important to make sure that you are comfortable with everything that is included. If you have any questions, be sure to ask your lender. They will be more than happy to answer them for you.
10. Create an estate plan for your new home
After you’ve bought your first home, you’ll need to either construct or revise your estate plan to reflect your new asset. You can ensure that your hard-earned assets are passed down to a loved one after your death by doing so. This can keep your property in the family and save your loved ones the trouble of having to go to probate court to get it.
While you may be tired of paperwork at this point in the house purchasing process, an Estate Plan may be finished in a surprisingly short period. You can complete all stages of the process from the comfort of your own home with the support of our professionals at Trust & Will. It’s a good idea to take one more step to protect your first house after you’ve finished all of the effort of buying it. Congratulations you made it!