Are you planning to buy a home? You should know that there are a number of factors that you need to consider while purchasing a home, especially if you’re a first-time homebuyer. Here is a homebuyers’ quick tutorial that will make you aware of the steps that you need to follow while buying a home.
7 Essential steps in a home buying process
7 Steps in a home buying process are discussed below.
1. Raise score is necessary – You should order your credit reports and check your score as soon as you decide to purchase a property. If your score is not good, then it may become difficult for you to take out a home loan with favorable terms and conditions. So, before shopping for a home loan, increase your score, if necessary.
2. Know about the market price – You’ll have to make a down payment on your home when you take out a mortgage loan. It is advisable that you make an idea regarding the current market price so that you can calculate the down payment amount. In addition to this, brief knowledge of market price will also help you to assess whether or not a property is overpriced.
3. Plan your personal finance – It is needless to mention that a homebuyer has to make a huge financial commitment when he/she decides to obtain a mortgage loan. So, take into account your income and expenditure and make a budget plan so as to save the down payment amount. You should also calculate your monthly mortgage payments in order to assess whether or not your financial condition will permit you to make the payments on time.
4. Get mortgage pre-approval – Getting pre-approved for a mortgage will help you to close on the purchase quickly. Pre-approval is also necessary as not all mortgage lenders want to work with a first-time homebuyer.
5. Decide what you want – Before beginning your search for a house, you should decide what features you want in your new home. It is advisable that you decide your priorities as per your affordability.
6. Search for a house – Inform your real estate agent about your priorities (such as, a swimming pool, the number of bedrooms, etc); it’ll help the agent to search for a house with the features you’re looking for. You should also mention your priorities regarding the neighborhood; for example, whether or not you want your home near an amusement park.
7. Arrange for home inspection – As soon as you find a new home, arrange for a home inspection before negotiating on the price with the seller. An experienced home inspector will find out deficiencies and submit a report, on the basis of which, you can negotiate on the home price.
Apart from following the above steps, a homebuyer should also purchase adequate home insurance coverage so that he/she doesn’t suffer from financial losses due to theft, disaster or other unexpected circumstances.