04 February . 2016
Get the Help you Need for Home Buying Success
Purchasing a home is a major milestone that tops many people’s lifetime to-do lists—and maybe their list of financial fears too. Here are 9 Steps to Successful Home-Buying, which helps explain how to prepare to buy a house—and help safeguard your finances in the process.
1. Determine what you can truly afford.
Well, there are no surprises here: Your first step in the home-buying process is to determine your budget, just as you’d likely do for any other major financial decision.
2. Figure out which mortgage is the right fit for you—and get pre-approved.
Now that you’ve nailed down your numbers, it’s time to start shopping for a mortgage lender with a reputation for good customer service and timely closings. You’ll likely have a lot of questions—like how long the process will take and what the qualifying guidelines are—so choose a lender that answers them all satisfactorily.
3. Consider a financial trial run.
If the idea of not being able to afford your mortgage keeps you up at night, this step is all about assuaging those fears by simulating the experience of being a homeowner—before you buy. Start by totaling up all of the monthly costs associated with a home purchase, including your projected mortgage payment, tax and insurance estimates, HOA fees and home maintenance costs. And don’t worry if you don’t have concrete numbers—the point is to see if you can afford a ballpark amount. If the sum of the expenses equals more than what you’re paying for housing now, then subtract your rent from the total. The difference is what you should consider transferring to your savings account for a few months to simulate what you’d be paying out to cover your monthly new-home costs. If you can comfortably pull this off, then rest assured that you can probably handle the typical expenses of being a homeowner. But if you can’t—or you’re making unpleasant trade-offs—consider readjusting your home price until all of these costs are feasible on your current income.
4. Decide which house features are must-haves vs. nice-to-haves.
It’s the rare lucky person who finds the perfect home within their budget, so before you go house hunting, brainstorm a list of what you absolutely must find in a home—and which features are simply nice extras.
5. Start house hunting, and determine whether you’ll work with a real estate agent.
Now for the fun part: house hunting! Browsing online resources for available homes in your neighborhood is a good place to start, and can help confirm whether your budget and house must-haves are reasonable in light of what’s for sale.
6. Research homeowner’s insurance.
Your lender will likely require the name of the agency providing you with home insurance, which is why you should shop around for a quote while you’re still house hunting.
7. Put in an offer.
So you’ve fallen in love with a property that meets all of your needs and some of your wants—and it’s within your price range. Let’s make an offer!
8. Review the contract carefully, and submit your mortgage application paperwork.
The seller accepted your offer—congrats! But before you sign on the dotted line, you should make sure to review the contract thoroughly and understand every single clause.
9. Sign the papers!
Before the big day, you’re entitled to a walk-through to confirm that nothing has changed since the inspection. After that, make sure you have all the money required for the closing wired into the correct account.
For a more detailed list head to forbes.com