Ready To Buy?
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Buying a home doesn’t have to be overwhelming. There are many things I as your Realtor can do throughout the process to make it manageable and predictable, and to reduce the obstacles to purchasing a home. Allow me to work with you to complete each of the steps below, and you’ll be well on your way to homeownership!
Get Your Finances Ready:
Getting your personal finances in order is a crucial part of a smooth homebuying process. Now’s the time to figure out what price range is affordable for you, how large a down payment you can make and whether you’ll need to work on building your credit score. Research these questions early on and you’ll be starting your homebuying journey on the right foot.
[ ] Check your credit score. (A higher score could help you get a lower interest rate.)
Find The Best Mortgage Type For You:
Adjustable-rate (ARM) or fixed-rate? Government-backed or conventional? Before you decide which type of mortgage to pursue, it’s important to learn the advantages and drawbacks of each one. Choosing the right type of mortgage can boost your chances of approval or save you thousands in the long run. Next, you can get a clearer picture of your financial commitment by estimating your monthly mortgage payment, including interest and additional costs.
[ ] Determine if a conventional or government-backed loan is right for you.
[ ] Decide whether an ARM or fixed-rate loan better fits your needs.
[ ] Choose whether you want a 10-, 15-, 20- or 30-year loan. Remember, the longer the term, the more you will pay for your home over the life of the home. Sometime the difference of a few hundred dollars more per month on your mortgage can half the amount of time it takes to pay your home off.
Find The Right Mortgage Lender:
Choosing a mortgage is a long-term commitment, so it’s worth your time to shop around for the best mortgage lender. Be sure to ask which fees you’ll be responsible for paying at closing, as the answer varies by lender. Keep an eye on current mortgage rates and compare multiple lenders so you can be confident that you’re getting the best deal.
[ ] Here is a lender I love working with. She guarantees a 21-day close and is especially adept at achieving $2500 grants in certain inner city areas.
Get Pre-Approved For A Mortgage:
Working with a lender to get preapproved for a mortgage is an important step in accurately determining your budget. A preapproval letter shows sellers and real estate agents that you’re a serious buyer and can give you a crucial edge over competing home shoppers. Keep in mind that a pre-approval letter is typically valid for only 60 to 90 days, after which it will need to be updated. Most Listing Agents and Sellers will not accept an offer without a pre-approval letter, so this is a very important part of the process. Put simply, you don't want to find the home of your dreams and then lose it to someone else who's already checked this box.
Find Your Property:
Now for the fun part: shopping for your home. Is a good school district important to you? Access to public transportation? Can’t live without a big yard? Figuring out which home features you can and can’t live without is as important as choosing a great neighborhood. Working with the right real estate agent can help you navigate these questions and get you ready to make an offer.
[ ] Decide which features matter to you (number of bedrooms, bathrooms, lot size, etcetera)
Make an offer:
[ ] Have your Realtor prepare a CMA (Comparative Market Analysis) to determine a fair and competitive offer price
[ ] Decide what to offer
[ ] Who pays for and chooses the Title company?
[ ] Will the Seller contribute to closing costs? You may be able to negotiate for the Seller (or even the lender) to pay some of the closing costs or other prepaid items, such as taxes.
[ ] Is a Survey needed, and who pays for a Survey?
[ ] Will the Seller pay for a Home Warranty?
[ ] Here are a few Home Warranty Companies you might consider.
[ ] How long is your Option Period? 10 days is very typical, but not set. There are many reasons one might lengthen or shorten an Option Period.
[ ] Present your offer
Important parts of the process after the offer:
[ ] Schedule a Home Inspection early in your Option Period.
[ ] HERE is an inspector I like working with. He is very detail oriented, and will catch lots more than most buyers expect. Many things are small enough to overlook, but some may be big enough to require fixing by the Seller, or to use as a tool for negotiating down on your offer price.
[ ] Schedule any other inspections and bids for roof, plumbing, fencing, etcetera during the Option Period
[ ] If one does not exist, notify the Title company to order the Survey after the end of the Option Period.
[ ] Notify the Title company which Home Warranty Company you wish to use, if any.
Submit Your Mortgage Application:
Do you have all of these documents ready?
[ ] W-2 forms from the past two years
[ ] Pay stubs from the past 30 days
[ ] Proof of other sources of income
[ ] Federal tax returns from the past two years
[ ] Recent bank statements
[ ] Details on long-term debts like car or student loans
[ ] ID and Social Security number
Close On Your New Home:
This is the home stretch! Getting familiar with the standard closing documents ahead of time can make the process less daunting. By this point, you should also know what you’ll owe when you sit down to close so you won’t be caught off guard by closing costs — some of which may be negotiable.
[ ] Find out from the Title Company what costs to expect at closing
[ ] Learn which documents you’ll encounter at closing