Beginning The Process
The first thing you MUST do, is find how much you can afford. You need to do this prior to house-hunting so you don't fall in love with a home that sadly could never be yours.
Make a list of things your home MUST have. Whether it be a pool, a big yard for the kids and pets, how big the closet is or even if it has a fireplace or not, all these things written down in a prioritized way can help you keep your needs vs wants in check.
Take notes on the homes you're looking at. After viewing a few homes, it may be difficult to remember what home has what. A simple way to rememebr is to create an audio tape as you go along.
Although you may fall in love with the first home you view, continue looking. You never know, you might find a new one that is really the right home for you.
It's More Complicated Than Just Finding A Home
Confused? There is a lot more to home buying than meets the eye (as you can see).
How Much Home Can You Afford?
Find a target price range and stick to it. A mortgage lender will want you make sure that you are able to handle the down payment of the home, plus your monthly mortgage payments. Let's not forget about how interest rates and personal finances can influence the amount of house you can afford. That is why it is always good to talk to a lender before you start home shopping.
A lender isn't just going to give you money just to give it to you, a lender is looking for three big factors.
Your income. Typically you will need to verify your income sources. If self employed, will need to provide pay stubs and W-2.
Your assets. The required down payment will vary depending on which loan program is chosen.
Your credit history. The lender will review to determine the type of credit used, the amount owed and the borrowers history of repaying debt.
You can find a mortgage calculator here.
Purchase and Sale Agreement
Once you've found the home you would like to buy, it is time to complete the purchase and sale agreement.
The purchase and sale agreement usually consists of...
- Earnest money receipt
- Financing addendum
- Inspection addendum
- Conditions/disclosure addendum
- Contingency addendum--when needed
- Addendum outlining special conditions
- Lead-based paint notification--when needed
- Agency disclosure
- Property disclosure form completed by the property seller.
Once you have found the home that you would like to buy, it is then time to have a professional inspection of the property. The inspector will review the condition of the home, noting all the areas of improvement as well as the positive aspects of the home. Remember, like a human, no home is perfect.
Settlement- Who Pays What
In the negotiation stage, a closing date is mutually determined. A "Closing" is when the buyer and the seller sign all the paperwork and pay your settlement fee's and the documents are recorded.
The Buyer will receive:
- Earnest money deposit
The Buyer will pay:
- Legal fees paid to the escrow company for preparing the closing
- Document preparation fees
- Recording and notary fees
- Title search and title insurance
- Local transfer taxes (if any)
- Repairs or inspections the buyer has agreed to pay for
- Loan fees
- Appraisal fees
- Credit report fees
Moving is a big deal and can be extremely overwhelming. We have a list that can help you figure out what needs to be done week by week.
The moving list is found here.
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