How To Buy A House
Knowing your mortgage qualification is the first step. You can get pre-qualified for a mortgage, and get a pretty good idea of what you can borrow. However, i f you get pre-approved for a mortgage, you will remove any uncertainty. A pre-approval is also important as you negotiate the purchase of your property.
Buying a Home
Know Your Rights as a Homebuyer
Before you start, there are many laws that protect you from scams, unnecessary expenses, and discrimination in the process of homebuying. Know your rights!
Find out How Much Mortgage Can You Afford
You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that’s your monthly income before taxes and other paycheck deductions are taken out.) You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you’ll be able to afford. Follow our tips and use these simple calculators to see how much you can afford in a mortgage payment.
Create Your “Wishlist”
Make your wish list. Focus on the features you want in a home: 2 bedrooms or 3? 1 bath or 2? Garage or no garage? Knowing what you’re looking for will help you focus your search. And it will help your real estate broker, too. (Please click here for a sample wishlist.)
Now, it’s time to:
Find a Real Estate Broker (click here)
Mortgages and Homebuying Programs
Many different kinds of mortgages are available to you. Read about them, and make sure you understand the pros and cons of each. Your real estate broker can help you. A loan officer can answer your questions and help you get started.
Shopping for a Home
Now you really begin house-hunting. Your real estate broker will be able to find listings for you, based on your wishlist. But don’t stop there! You can do your own looking, and then ask your broker to show you the house. Start with the Internet. Pick up real estate flyers at local grocery stores and convenience stores. Read the real estate sections of your local newspaper. Drive around neighborhoods that interest you and write down addresses where there are “for sale” signs. Go to open houses. Try everything!
Building a Home
If you want to build a new home, there are other things you need to know before you begin. Learn about construction standards and about buying land, so you know your rights.
Home Inspections
When you make an offer on a home, it’s a good idea to make your offer contingent on a home inspection, conducted by an independent authorized inspector. You will have to pay for this inspection yourself, but it could keep you from buying a house that will cost you far more in repairs, down the road. If you are satisified with the results of the inspection, then your offer can proceed. If you aren’t,you may want to negotiate, asking the seller to pay for certain repairs or asking for a lower price.
Appraisals
Your lender will require you to get an appraisal of the house you want to buy, to make sure it’s worth the money that you’re borrowing. You may select your own appraiser, or you may ask your real estate broker to help you take care of that.
Homeowner’s Insurance
Lenders require that you have homeowners insurance, to protect both your interests and theirs. Like everything else, be sure to shop around for insurance that fits your needs.
Settlement or Closing
Finally, you’ve gone through the whole process, and you’re ready to go to “settlement” or “closing.” We know you’ll be excited, but be sure to read everything you sign! And before you go, read this important information about your rights.
Moving
Looks like you’re ready to move. There’s a lot to consider as you plan your move. The good news is that there’s lots of help.
Much of this information is from HUD’s, “Buying A Home.”