Every homebuyer knows that looking for the right home isn’t easy, and preparing for the purchase is much harder. However, this article will help you streamline the process. It will teach you the essential checklist you need when purchasing your very first home. This should make the process much faster, especially if you’ve got everything ready on this list. Once everything is checked, you have to find the right home for you and then buy it. It’s simple as that. Here are the essentials when it comes to purchasing your first home.
Shopping for Mortgage and Pre-approval
Shopping for a mortgage is a term used by homebuyers when looking for the right mortgage they need. You can do this without even choosing a home that’s meant for you.
Essentially, it is your right as a buyer to get multiple pre-approved mortgage rates from different lenders. If you only work with one lender and one pre-approved mortgage, you stuck with that one without knowing other offers. Remember that offers can vary widely, and some can truly cater to your needs. Additionally, having multiple pre-approved mortgages can help you see various perspectives of different lenders.
Some might hit you with a higher down payment and low monthly rates, while some may do the reverse. Regardless of mortgage rates reaching one of their lowest points this year, you still have to shop for home loans and choose the right one for you, and know that the cheapest mortgage may not be the one meant for you. To expedite this process, make sure that you get your credit checked before you start shopping for a mortgage.
Compare Mortgage Rates
Comparing mortgage rates is one of the most important things you should do as a home buyer. One of the essential things you need for this is a comparison calculator for your mortgage. Many buyers forget this part of the process, but it is essential that once you’re finished shopping for your mortgage, you compare them with one another.
Believe it or not, many homebuyers find that the most expensive mortgages can actually save them more money in the long run through this way. Do your own calculations, and it won’t be that hard through the use of these calculators. Through this process, you’ll find the right mortgage for your financial plans in the future.
Choosing the Right Payment Type
Given that we have so many payment options nowadays, you must weigh in each option before you go right into purchasing a home. Many buyers get their payments delayed because the payment option they chose isn’t right for them.
This can lead to late fees that some of them can’t afford. So weigh in your payment options given by various lenders for you, and remember that it is essential that they give you various options. If a lender only gives one way to pay for your mortgage, do not work with that lender. That will lead to more harm than good regardless of their offer.
The down payment is usually the main problem why most Americans today can’t buy their own homes. With many homes now costing above $350,000, it’s understandable why this is the case. However, you still need to pay for the down payment one way or the other.
If you find yourself struggling to pay for the down payment of your dream home, it might not be meant for you. However, if you’re struggling to pay any down payment of any home in the market, it might be because you are struggling yourself. During these situations, you can still purchase a home with the help of the government.
Government departments such as the USDA and the FHA offer affordable loans with zero interest for low-income earners. They can also sell you homes without any down payment. By working with these government entities, you should be able to purchase a home regardless of your family’s income.
Once you’ve chosen a home to your liking and you’ve gotten your finances in check, it’s time for you to request a home inspection. You can either do it yourself or ask your real estate agent or the seller to do it for you. But we suggest that you do it yourself if you want an honest opinion of the home. This will save you a bad deal that may cost you more in the future.
The Escrow Process
The escrow process is when the property seller has accepted your offer and must now wait for bank approval of their loan. This process may include free inspection and hazard insurance depending on the deal or the lender chosen for the process. This can take a few weeks before it happens, so make sure that you’re not caught off-guard by this. Also, make sure that you still have a place to stay during this process, as you might be left homeless for quite some time while waiting for approval.
After this, you essentially own your very first home! Congratulations! There may be some steps that might have been overlooked due to the differences in real estate laws in every state, but everything on this list should be applicable regardless of where you live and where you’ve purchased your home. So now you know these things, feel free to look and purchase your first home!