Buying Your First House For Dummies
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You can never have too much information when shopping for your home. This comprehensive list was developed by real estate professionals to help you maximize your home buying experience. From looking at your budget to examining closing costs, this list can assist you from start to finish.
Buying a house can take as little as a few days if you're buying in cash, or can take years if you're counting the amount of time it takes you to save money for a down payment and decide where to live. In a competitive housing market, you may put in multiple offers on homes before one is accepted. Conversely, mounting worry over a housing recession could lead more sellers to pull their homes from the market, making it more difficult to find a suitable property. If you already have your money saved and have a good idea of the neighborhoods and type of home you want, the process will probably take you two to six months. Ask a local real estate agent for a more accurate timeline based on your local market conditions.
Buying a house requires a lot of time and effort, but these 10 steps can help make the home buying process more manageable and help you make the best decisions for your personal and financial situation.
Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third-party company and is independent from the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.
As you can imagine, there is a lot of paperwork involved in buying a house. Your lender will arrange for a title company to handle all the paperwork and make sure that the seller is the rightful owner of the house you are buying.
This guide takes a look at saving for a deposit, how to start your house search and the process of buying a house. We also talk about the finer details like finances, mortgages, and moving in.
Down payment: Buying a home with no money down is possible, but most homeowners need to have some cash for a down payment. A down payment is the first major payment you make on your loan at closing.
There are multiple parties involved when getting a mortgage and buying a house. Your real estate agent is your representative in the home purchase transaction. Your agent will look out for your best interests by finding homes that meet your criteria, get you showings, help you write offers and negotiate.
A real estate agent represents you and helps you understand how to buy a house. Your agent will show you properties, write an offer letter on your behalf and assist in negotiations. Real estate agents are local market experts and can also advise you on how much to offer for each property.
Only you can decide which property is right for you. Make sure you see plenty of homes before you decide which one you want to make an offer on. Like much of the home buying process, you can do a great deal of your house hunting online.
If you need specialized insurance for events like earthquakes, floods, or a nuclear explosion, PolicyGenius can add that in. But one of the biggest advantages for first-time home buyers is that you can request to speak to an expert, who will explain your options and help you find the best coverage.
In general, buying a home is likely to work best for those who plan to stay in their homes for at least five to seven years. However, depending on your situation and the local market, the numbers might work out for a shorter time period.
When looking for a new place to live, the first question you ask yourself will help drive the rest of your decision-making. Should you rent or buy? Buying may seem appealing because you will put an end to escalating rent and can build equity. But the reality of routine home maintenance and repairs can quickly drain a bank account.
You can find homes for sale on your own, but a good broker can help you make sound decisions and guide you through the home buying process. A broker can also help you get access to homes as soon as they hit the market, before they may be listed online.
Understand that making an offer on a home is sometimes the start of a psychological game. You likely want to get the home for as little as you can without losing the house outright. The seller wants to maximize the selling price of the home without scaring you away. Where should you start with your first offer? Conventional wisdom says to begin at 5 percent below the asking price, but market conditions will largely determine how much wiggle room you have. The more competitive the market, the more likely you are to face multiple bidders. In a soft market, where listings have been sitting unsold, you will have more negotiating power. In a rising market, prime listings will command the full asking price or more, and sometimes offering just a few thousand dollars above listing price can help your offer stand out. Either way, keep your budget in mind when you make your first offer and set a cap of how high you are truly willing to go.
Once your bid on a house is accepted, you set in motion the process that will take you to finally holding a set of keys in your hand. While you may be eager to move into your new place, it is in your best interest to do your due diligence to make sure you get a home that it is in good condition and at a good rate.
A final walk-through is an opportunity to view the property before it becomes yours. This is your last chance to view the home, ask questions and address any outstanding issues before the house becomes your responsibility.
When thinking about buying a home, consider whether you want to put down roots or maintain flexibility with your living situation. How secure is your job, and can you comfortably budget for home repairs and maintenance on top of monthly housing payments? Are you ready to stay in one place? Do you have kids or family members to consider?
After you make an offer, the seller can turn it down, counteroffer or accept your offer. If the seller turns you down, move to the next house. If the seller counters, consider accepting or countering back. If the seller accepts your offer, you can think about celebrating.
As a home buyer, these numbers aren't meant to scare you, but merely to convince you of the importance of fully understanding the terms of your mortgage and choosing a home that you can honestly afford. Buying a home is a momentous occasion full of joy and achievement. It is also one of the most significant financial investments you will ever make. When your heart tells you to buy the stately Victorian with the gabled windows, make sure to check with your head -- and your budget -- first.
The first critical step to buying a home is figuring out how much you can afford to spend. Almost no one buys a home with cash. Instead, homebuyers get a loan called a mortgage from a bank. They pay off the loan in fixed monthly payments based on the total amount of the loan and the interest rate. Before you even begin looking for a house, you need to talk with a bank -- or several banks -- to get pre-approval for a mortgage.
The bank will ask you a series of financial questions to determine how much you can afford to pay each month. That number will determine the price range of affordable houses. The main numbers the bank wants to know are how much you earn in income and how much you owe in debt (credit cards, student loans, car loans, etc.). While these numbers give a solid big picture of your finances, you also need to check your budget.
Throughout the pre-approval process, there are some key facts to remember. The monthly mortgage payment is only part of the expense of buying a house. In most cases, you're expected to make a down payment of at least 20 percent of the home price to secure the loan. (First-timers can take advantage of programs that allow them to put down significantly less money.)To do that, you'll need a significant sum of cash on hand. There are also a number of additional costs that are not included in the standard calculation of monthly payments. Ask your lender about property taxes in your area, the cost of mortgage insurance and the average closing costs for homes in your price range. 781b155fdc