This Guide is to help you find and buy your first home.
Buying a home is one of the most important personal and financial decisions you'll ever make. I am always here to answer your questions along the way. I want your first real estate experience to be both hassle-free and rewarding.
This is an overview of the procedures normally followed in a typical home purchase. Read on and see how finding and owning your dream home can be easier than you think with help from Emily Schuyler and CENTURY 21.
Preparing to Find and Buy a Home; Become Educated!
First, learn about the process and requirements for buying a home.
Here are the facts:
Starter costs of renting may be about the same as a house down payment. As you start your search to find a home, keep informed. Talk with people who've gone through the home-buying process.
Consider talking to a lender to get a pre-approval letter. This will speed up the home buying process. You also can calculate how much you can afford in monthly payments. This website has online financial calculators to help you.
When you decide to find and buy a home itís one of the most important decisions of your life. It combines your dreams with wanting what's best for you and your family.
Have a Financial Plan Before You Find a Home
How much house can you afford? Are you pre-qualified?
You can reduce the stress of home buying by talking to a mortgage professional, before you find a home you want to purchase. Consider developing a financial plan. This plan can become your guide not only for saving money for the down payment, but also for covering other expenses such as your credit check, mortgage application and closing costs.
A few financal terms to learn before talking with a mortgage professional:
• Mortgage Pre-approval
A pre-approval is a simple calculation done by a mortgage professional that tells you the amount you'll be able to finance through a loan and what your monthly payment will be. When you find a home to buy, a pre-approval also reassures the seller that you have the financial means to purchase his or her home.
• Your Down Payment
A down payment is the money you pay up front toward the purchase of your new home. Typically, the larger your down payment, the less you pay each month on the mortgage, and the lower the interest costs will be over the life of the mortgage.
• Adjustable Rate Mortgage (ARM): This is a mortgage in which the interest rate is tied to a specific economic index and may adjust at specific times. Overall, your monthly payment may go up or down at intervals specified in the disclosure associated with this type of mortgage, depending on the current interest rate.
• Fixed Rate Mortgage (FRM): This is a mortgage with an interest rate that does not change during the entire term of the loan. This means the monthly payments for principal and interest are also fixed for the life of the loan.
• Conventional Mortgage: This is mortgage that is not part of a government-housing program, typically has a limit of $417,000, and is not insured by the federal government.
• Jumbo Mortgage: This is a mortgage that typically exceeds $417,000 and is not insured by the federal government. These loans usually have higher interest rates.
• Government Backed Loans: There are two types of government-backed loans -- FHA and VA. FHA loans are insured by HUD (the Department of Housing and Urban Development of the United States) and VA loans are insured by the Veterans Administration.
• Closing and Other Additional Costs
After you find a home and receive mortgage approval, the closing is when ownership of your new home officially transfers from the seller to you. In some cases, sellers pay the closing costs. If not, you need to be prepared to pay this additional cost. This can add another two to five percent to the home purchase price.
• Good faith deposit: This deposit reassures the sellers you are genuinely interested in buying their home and are willing to make them an offer. A good faith deposit can vary between 1% and 10% of sales price depending on the market and can be applied to the down payment.
Finding A Home
When can we start? I am ready to start the search as soon as you are.
You'll want to have an idea of the features you "want" versus "need" in a home to help me guide you in a successful home search. Then the fun begins!
With each house you tour, ask yourself these questions:
• What features are most important to me? Number of bedrooms? Number of bathrooms?
• Does it have the features I am looking for?
• Do I want a newly constructed house or a house that has been lived in before?
• What are the school districts like?
• Are there kids in the neighborhood who are the same age as my own?
• How much work does this house need?
Making An Offer
When you find a home you want to buy, you'll make the seller an offer in writing. When you make an offer, you not only specify the price you are willing to pay, but also the other details of the purchase such as:
• How you intend to finance the home
• Amount of the down payment
• Who pays the closing costs
• What inspections will be performed
• Whether or not personal property is included in the purchase
• Terms of cancellation
• Any repairs you want done
• Date you will take physical ownership and possession of the property
• How to settle disputes should they occur
Before making an offer, make sure you are considering the following:
• Property Conditions
• Home Improvements
• Take note of what the previous owners have done to the house to determine if these improvements warrant the asking price and/or were done correctly.
• Market Conditions
• Seller Motivation
• If an individual needs to sell quickly due to his or her personal situation, he or she may be more willing to negotiate.
• Once you find a home and submit your offer, you then wait for the seller's response. The seller can accept, reject or counter your offer with one for a higher amount.
Your Good Faith Deposit
Along with your offer, you'll provide a "good faith" deposit that demonstrates to the seller your serious interest in buying. This money is deposited only once the offer has been negotiated and accepted by both parties.
The Home Inspection
After you find a home and make an offer, a house inspection is a great idea. I suggest getting an inspection on every property I sell.
The most common type is the General Home Inspection. A home inspector can provide you with a complete service that covers from the basement to the attic, as well as the exterior of the home, walls, chimneys, and fixed appliances such as refrigerators and stoves. Other specific elements that can be included:
• Termite inspection
• Water Quality
• Septic Tank
The Final Walk-Though
Before the closing we will want to ìwalk-through the house. This "walk-through" is an opportunity to ensure that the house has been left in the expected condition.
You should make sure that all the items the owner agreed to leave are still there, such as kitchen appliances. This may also include furniture and accessories listed in the final sales contract. In some cases, you can ask for a discount or credit at the closing to cover missing items or last-minute damages to the property.
This is when the final documents are signed, money is transferred and the keys are passed on to you! Welcome to your new home!