Apartment getting too cramped? Ready to move out and move up? Buying your first house is an exciting milestone. Though the task can seem daunting, use these 5 home buying basics to keep you on track and help the process run smoothly.
1. Determine What You Can Truly Afford
It’s suggested that house payments generally not exceed 28% of your monthly gross income. Consider seeking help from a loan officer who can help walk you through some anticipated expenses you may have, or using a mortgage calculator.
2. Figure Out the Right Mortgage for You and Get Pre-Approved
Decide which mortgage would be the best fit for you. The most common are a fixed-rate mortgage and an adjustable rate mortgage (ARM). Family Trust offers both!
Next, apply for a pre-approval. In this process, your lender reviews financial information such as your credit report, W2s and bank statements, and commits to giving you a mortgage for a specified interest rate. It’s a good idea to consider doing this early since most real estate agents request this upfront.
3. Determine “Must-Haves” vs. “Wants,” and Start the House Hunt
Before you go house hunting, brainstorm a list of what you absolutely must find in a home and what features are just nice extras.
“Must-haves” might include: the number of bedrooms and bathrooms, closeness to work, and access to your preferred school districts. “Wants” might include the landscaping, a pool, or anything else you can easily fix or install yourself.
4. Put in an Offer
When you find the right house for you, look at similar properties in the area and compare prices. Check the square footage and find out cost averages based on that size. Find out why the current owner is selling, this could give you clues as to how flexible they will be on the price.
Next, consider how long the home has been on the market, and how willing the homeowner is to sell. If the seller has already moved out, you may have a better chance of getting a lower offer accepted. If they’re casually listing the home, the seller may be fine waiting for the list price.
5. Sign the Papers
Before you sign, review the contract thoroughly and schedule your final home inspection. You’ll then submit a mortgage application. Review all closing costs before you sign the contract.
Before signing day, it’s good to do a final walk-through to confirm that nothing has changed since the inspection. After that, make sure all the money is in the correct hands and wired to appropriate parties. On closing day, bring your photo I.D., as well as any paperwork you received throughout the home-buying process.
Once you’ve signed the paperwork, you’ll be handed the keys, and you’ll officially become a homeowner! Read more about first-time home buying. Our mortgage team is here to help you choose from a variety of home loan options to best fit your needs. Call to set up a free appointment today! 803-367-4100 ext. 3014.