Buying a Home a Good Idea?
Not everyone is cut out to be a home owner. There are a number of factors to consider when buying a home before signing the papers. A buyer should carefully analyze his finances before buying a home. He will need to have approximately 20 percent of the home’s value saved up for a down payment, plus money to cover closing costs. Next, he must consider what he can truly afford. This is more than a monthly mortgage payment. He must also factor in things such as homeowner’s insurance, maintenance, security systems, utilities and homeowners association fees into the equation. MySalary.com states that his monthly house payments shouldn’t exceed 28 percent of his salary.
Before sellers will take an offer seriously, a buyer must be pre-approved for a home loan by a lender. A bank will analyze her finances and tell her how much they will loan her. The process begins with pre-qualification, which can be accomplished over the phone, online or in person through banks and credit unions. Pre-approval is next and usually is done by appointment. It’s more detailed than pre-qualification and looks over the buyer’s assets, debts, income, credit report, etc. She can do this with several lenders and choose from the best offer.
Finding an Agent
Making an Offer
Now that the buyer has found a home in her price range and has been pre-approved by his/her bank, the buyer and real estate agent will make an offer to the seller. If it is accepted, the closing process will commence. The sellers can also counteroffer with altered terms and conditions. During this phase of the buying process, it’s time for a home inspection. Home inspectors search for problems and can save buyers from purchasing a home that will cost a bundle to repair. A termite inspection is also recommended. While it may be tempting to forgo extra costs, a home inspection and termite inspection are expenses that should not be skipped.
Closing on a House
The closing process transfers ownership of a property from the seller to the buyer. It culminates in a meeting involving the buyers and their agent, the sellers and their agent, an attorney and possibly mortgage loan specialists. Shortly before the meeting, the buyer will walk through the home a final time to make sure there is no new damage. This final walk-through is his last chance to see the house before buying it. During this time, the buyer also receives a settlement statement telling him exactly how much he’ll need to pay in fees at the closing meeting. At the meeting, documents will be finalized and signed. The buyer is now a homeowner.