Monday May 22, 2017

How to Buy a House

There are a number of steps which you need to complete before you can even start searching for a home—and then a number of steps left in order to complete the process.Want to take the huge step of purchasing a house, but don’t know where to begin your home-buying journey?

There are a number of steps which you need to complete before you can even start searching for a home—and then a number of steps left in order to complete the process.  It’s very important to learn all you can about the process and the housing market before you close on a deal.

The first thing you should do is find out your credit score by ordering a free credit report from one of the major credit bureaus (you’re entitled to one every year).  If your credit score is great, then that’s a great first step.  If it isn’t, you’ll need to clean up your score by paying off debts and establishing a better score.  If you don’t have a credit score, you’ll need to establish one. 

The next thing you should do is ask yourself if you have enough money and a steady enough stream of revenue to consider buying a home at all (your debt-to-income ratio is relevant here, both to you and to a potential lender).

You can start this out by using an online calculator to find out how much home you can afford.  This is only an estimate, though, and you’d really do best to calculate it again yourself.  You can also speak to a lender for pre-approval for a mortgage.  Pre-approval helps you to find out the answer to this question, and it also is handy later in the home buying process since it makes a seller more willing to consider you if another buyer makes an offer and isn’t pre-approved.

Assuming purchasing a home is appropriate for you financially, you should start educating yourself on every aspect of the housing market.  Learn about how lenders work and how mortgages work, and all the variations which are available.

Find out about government programs which might assist you as a first-time home buyer.  Learn all you can about the risks of home buying so you can avoid pitfalls.  In particular, learn all you can about real estate agents.

Next you can finally start considering what you want in a home.  You’ll want to divide your list into a column of things you really need vs. things which would just be nice to have.

Dismayed that you can’t afford as big or as fancy a house as you’d want within your budget?

Try looking at a different region of the country—you may be able to afford more than you think.  Can’t do that either?  You can always wait a few more years before you try purchasing a home.

Once you’ve determined whether you can afford the type of home you want, you can start searching for a home which fits your requirements.  Your real estate agent will give you listing sheets which you can look over, and you can also check ads in newspapers and magazines.

The internet contains a lot of advertisements for homes for sale as well.  Once you have a list of candidates you can drive out and see the homes and neighborhoods which they’re in.  Once you find a house you really want, you can make an offer on it.  The procedure for offering on a house varies a great deal from location to location across the US. 

How much do you offer for a home?

There is no set formula for determining a perfect offer price, but there are some facts and figures you can get hold of which will help you to make an offer.  You can analyze the market as well as the sale prices of comparable properties in the area.

Finding out how much the seller’s existing mortgage balance is can help you to figure out the minimum the seller will likely be willing to accept.  Finding out how much the seller paid for the housing originally may also contribute to your offer price, but is only a basic guideline. 

Before a sale goes through, you may be required to adhere to some other requirements depending on where the property is located.  Home inspections are required in some states before an offer is finalized instead of after.  This is a safety inspection which checks for things like building code violations, radon gas, mold, lead paint, insect infestations, septic problems, and more.

As you’re on your way to closing on the house, make sure you stay abreast of the proceedings at all times.  Every day you should make sure that everything is going smoothly.  Keep the lines of communication open, and have a backup plan in case the sale falls through.  Good luck on purchasing your house!

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