I Want To Buy a House But Need Help
Buying a home is emotionally and financially involving. Owning a home is considered a safe and steady investment especially when its value increases and the amount of debt decreases. If you are a first time home buyer, there is plenty to think about; doing your research prior to starting the home buying process will make things much easier. If you are considering buying a home and you are uncertain about some details, here is a guide to the home buying process.
Check your Credit Report
Before getting a mortgage, you need to assess your credit report. You are entitled to a free credit report each year. In Canada, you can get your credit report from TransUnion or Equifax which use a scale of 300-900. The higher your score, the better the loan you will qualify for. Check your credit report for any errors and if you find any, make sure you dispute them.
Find a Mortgage Lender
Before you shop for a house, make sure you find a suitable mortgage lender. This is crucial because you will find out how much you can borrow and this has a lot to do with knowing which house you can afford. Make sure that you have agreed to a monthly payment that you can easily afford.
After you have provided your financial information to your mortgage lender, it will be reviewed and they will let you know what amount you can get. Once you have been pre-approved for a mortgage, you will be required to provide financial documents such as w-2 payment, pay check stubs and bank account statements. Obtaining a pre-approval will help you know if you have been pre-approved for the amount you would like to borrow. Plus, most sellers prefer to work with pre-approved buyers.
Find an Experienced Real Estate Agent
You will gain a lot by working with a real estate agent; they use their resources to get you homes, which are not easily accessible to the public. Their familiarity with the location, negotiation skills and knowledge will help you get the best deal.
Find the Right Home
Make a list of the things you would want such as the number of bedrooms and bathrooms, size of the kitchen, type of neighborhood, location of the home, security and so on. You will be visiting many houses and it may be difficult to remember every detail about them, hence it is wise to take pictures or videos to help you remember. Keep in mind there are other expenses that come with owning a home so make sure you can afford it. Take as much time as you need; do not make rush decisions, after all a huge sum of money is at stake.
Make an Offer
After you have found your ideal home, make an offer. Most sellers quote a higher price because they expect that there will be some price negotiation. Real estate experts agree that it’s reasonable to start at 5% below the asking price. Making an offer is not final; the seller may make a counter offer to which you can also counter offer.
Make a Down Payment
Once you have agreed on the price, make sure you make an earnest down payment on time. Some states offer a grace period of a few days to change your mind or proceed with the contract.
Contact Your Lawyer
Before you sign the contract, the seller’s lawyer will send the contract to your lawyer for review. Make sure you read through the contract and ask your lawyer to clarify where you do not understand. Make sure you read the contingencies and understand the implications. The contract contains the closing date which is adjustable.
Get a Home Inspection
A home inspection helps to identify hidden problems that even the seller may be unaware of. Having a home inspection is a reassurance that your home is in good condition. Check that a section-by-section inspection is done to ensure that nothing has been overlooked.
Close the Sale
Make sure you meet all the costs that pertain to closing the sale. Closing costs include down payment, title fees, attorney’s fees, inspection fees or appraisal fees. Bear in mind closing costs are not limited to these costs.
Once you have closed the deal, it’s time to move in and enjoy your new house! Ensure that you pay your mortgage payments on time.