Steps in buying your first home

Understand a way to find and finance the right home for you

Buying a home takes a great deal of your time and energy, but these 10 steps can help make the house buying process manageable and make the most effective possible decisions.

1. Start your research early

As soon as you'll be able to, start reading websites, newspapers, and magazines that have property listings. Take note of the private houses you are interested in and see how long they stay on the market. Also, be aware of any changes in sales prices. This will give you the idea of most housing trends in the specific area.

2. Determine how much house you can afford

Lenders in general recommends that individuals should look for homes that will cost not more than 3 to 5 times of their annual income, if the home buyers attempt to make 20% down payment and have moderate amount of debt.

But you must make this determination based on your own financial situation.

3. Get Prequalified and Pre-Approved for Your Mortgage Credit

Before you begin searching for a home, you may have to be compelled to know how much you'll be able to actually afford. The best way to try this is to induce prequalified for a mortgage. To get prequalified, you only need to provide certain financial information to your mortgage banker, such as your income and the amount of savings and investments you have.

Your lender will review this information and tell you how much we can loan you. This will tell you the price range of the houses to look for. Later, you'll get pre-approved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank statements, etc.) so your lender can verify your financial status and credit.

4. Find the right real estate agent

Real estate agents are important partners once you buy or sell a home. Real estate agents can provide you with useful information on homes and neighborhoods that are not easily accessible to the public. Your knowledge of the house buying process, your negotiation skills, and your familiarity with the area within which you would like to live are often extremely valuable. And best of all, it costs you nothing to use an agent; it is compensated by the commission paid by the seller of the house.

5. Buy your house and make an offer

Start browsing houses in your price range. It can be helpful to take notes of all the houses you visit. You will see many houses! It can be difficult to remember everything about them, so you may want to take pictures or videos to remember each home.

Be sure to check out the little details of each house. For example:

• Test the plumbing by turning on the shower to see how strong the water pressure is and how long it takes to get hot water.
• Test the electrical system by turning switches on and off
• Open and close windows and doors to see if they are working properly.

It is also important to assess the neighborhood and take note of things like:

• Are the other houses on the block well maintained?
• How much traffic does the street have?
• Is there enough street parking for your family and visitors?
• Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?

Take all the time you need to find the right home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have agreed on a price, the home will go into escrow, which is the period of time it takes to complete all the remaining steps in the home buying process.

6. Get a home inspection

Offers to buy are typically dependent on a property inspection to check for signs of structural damage or things that may need repair. Your real estate agent will usually help you arrange this inspection within a few days after the seller has accepted your offer. This contingency protects you by supplying you with the opportunity to renegotiate your offer or withdraw it without penalty if the inspection reveals significant property damage.

Both you and also the seller will receive a report on the house inspector's findings. You can then decide if you want to ask the seller to fix something on the property before closing the sale. Before the sale closes, you will have a tour of the home, giving you an opportunity to confirm that the agreed-upon repairs have been made.

7. Work with a mortgage banker to pick out your loan

Lenders have a wide range of loan programs at competitive rates and a reputation for exceptional customer service. You will have many questions when buying a home, and having the help of one of our experienced and responsive mortgage bankers can make the process much easier.

Each buyer has their own priorities when choosing a mortgage. Some have an interest to keep their monthly payments as low as possible. Others are interested in making sure their monthly payments never go up. And others choose a loan based on the knowledge that they will be moving again in a few years.

8. Have the house appraised

Lenders will arrange for an appraiser to produce an independent estimate of the worth of the house he's buying. The appraiser may be a member of a 3rd party company and isn't directly related to the lender. The appraisal will let all parties involved know that you are paying a good price for the house .

9. Coordinate the paperwork

As you'll be able to imagine, there's plenty of paperwork involved in buying a home. Your lender will arrange for a title company to handle all the paperwork and make sure the seller is the rightful owner of the home you are buying.

10. Close the sale

At closing, you will sign all the documentation necessary to complete the purchase, including your loan documents. It usually takes a couple of days for your loan to be financed after the documentation is returned to the lender. Once the check is delivered to the seller, you're able to move in your new home!