What is the Home Buying Process? A Guide in Buying Your Dream Home

by Aug 27, 2020

Looking for a new home is a hectic process and needs to be paid attention at all times. The shelter is a basic need and we think of the purchase as long-term as possible. And since we have a huge market, here are the tips on how we can make the best choice.

Do your homework.

Do some research on the internet and read newspapers for any real estate listing. Take note of what you want and need in a home and pay attention to any posting of homes that you want to buy. Be very specific about what you and your family needs. Observe specific trends in housing that are evident in some areas.

Determine your budget.

The recommended budget for a mortgage is three to five times the annual household income. The down payment and other debts are accounted for. Estimate your capacity based on your current financial situation. Ask assistance from banks on how you can manage and save for the down payment of your house. This step is crucial as it can make or break your home buying experience. 

Pre-qualification and Pre-approval for Your Home Loan

Providing financial details to your mortgage banker determines the amount of money they can lend to you. This includes your salary, your savings, and investments. The bank will then determine from the details you provided. The submission of your financial documents, for example, W-2 statements, bank statements, payslips, etcetera, can help assess your financial status and credit standing.

Ask help from the Correct Agent

Real estate agents are experts with buying and selling homes. They can provide you substantial information on specific homes and localities which is not accessible to the public. Their expertise includes knowledge of the home buying and selling process, negotiation skills, and extensive knowledge of the area. It does not cost you anything if you consult a real estate agent. They are paid from the commission once the house is sold. 

Look for a Home and Make an Offer

Set appointments to visit houses within your budget. It is helpful to check homes and compare them. This way you will see a lot of houses, which is essential for your home buying process. Write down notes and take pictures or videos to help you with each spot you have visited. The place should be checked for plumbing and if the showers are in good condition. Experiment with switches if they turn on and off. Check out windows by opening and closing them to see if they work. A water pressure check is important too. Consider how heavy the traffic is at the adjacent street, or if there are residential buildings in the area and if they are maintained. You may also want to be sure that the site is near essential shops, leisure places, and access to public transportation, institutions, hospitals, and dining places. Take your time in finding the house for you and your family. Discuss with your agent, about the value of the homes in the area, what would be a decent offer. When the seller agrees to the proposal, the house will then go into escrow, which is the time to complete the process of home buying.

Get a Home Inspection

The arrangement for a home inspection can be arranged by the real estate agent. This is within a few days of your offer being accepted by the seller. If there is too much repair and fix needed for the house you have a chance to recheck the terms of your offer or cancel the sale without consequences. The inspector will confirm all significant material damage. The report done by the home inspector will be sent to you and the seller. Before the end of the sale, a visit to the house is made to confirm that all agreed-upon repairs have been done.

Select a Mortgage Bank to Deal with Your House Loan

Homebuyers have different considerations when choosing their home financing plan. Some wanted to keep their payments the lowest they can get monthly. Others would prefer the amount to be the same throughout and some would consider being able to move about after a few years of paying off the loan. Different banks have different ranges of prices when it comes to their loan programs. If you have inquiries regarding your mortgage ask your banker as many questions as possible to make the process easier and for you to understand. It is better to ask many questions before making life-changing decisions such as this.  

Have a home appraisal

Your bank will seek assistance from an independent appraiser for the value of the estate. The appraiser is not related to the lender. The appraiser will inform you if you are financing for the unbiased amount for the property. You will then know if you made a good deal. 

Complete the paperwork

The mortgage bank will arrange for a title company to work on the paper works. Before buying the house the company will confirm that the seller is the property’s legit owner. All other information must be verified on the seller’s part before the sale is finished. 

Complete the Sale

You will have to sign all the documents to conclude the deal of the sale. This includes your loan papers. The check for your loan will arrive after a couple of days and once delivered, you are now ready to move into your new home.

You must avoid regrets and bad decision making. Owning a home is a life-changing decision. You must make mistakes as little as possible. If you have any confusion or questions, please do not hesitate to contact Mr. G!