Buying a house is the most important decision in anyone’s life. And specially requires careful planning with feasibility and viability intact. Keeping your options open and looking out for at least a few months can help you pick the most optimal house of your choice.
We all dream for a home which blends with our personality and fits in our resources at hand. There are some significant steps to buying your first home which must be followed thoroughly as an average middle class person buys one house in his lifetime and you don’t want to miss anything significant here.
Steps to Buying Your First Home:
Steps to buying a house cover everything from research to handover of the keys. And it covers legal, emotional and other fundamental aspects in the utmost critique of the ways. Read below the process of buying a house for the first time:
1. Begin research early:
When you know its time to start looking out for your home, you must give at least a few months to careful research. Make a list of homes you are interested in and the ones available in the areas you refer to. Also, try and get more reviews from realtors and consultants.
2. Make your budget:
Make a realistic budget and keep it in mind while proceeding with your dream home hunt. A budget will help you in eliminating too many options and bring the available options to as real as possible. A rule of thumb here is pick a home which is no more than 3- 5 times your annual income for there is a 20% down payment too even if you get loan or mortgage.
3. See a mortgage lender:
You must get your credit approval and pre qualified limits based on your financials. This will be strong support in seeking further loans and credits. Lenders review them and then based on the analysis offers you their credit limits.
4. Check classifieds and realtors details:
Go out and about searching the property brokers around and talk to at least a few before deciding your agent. Additionally, an online guide like Trulia can be a great support and help too
5. Start visiting the houses you shortlist:
Be sure to take ample pictures and write down the details and findings as you would need to assess at the ends and pick your best fit from these. Also try and talk to the homeowners and people who may have lived here, to find more details
6. Check the condition of the house:
Plumbing, electric fittings, walls and windows must be checked properly to see for any problems in them as they cost a hell lot of money.
7. Check the neighborhood:
Traffic and people staying around must also be checked. Also, nearby school, library, hospital and public transports in addition to parks and other facilities also play an important role in determining the house for you
8. Get the home inspected:
A home inspector must be appointed to check the condition of the home you are looking at and allow him to assess and send you feedbacks with realistic costs for procurement too
9. See a mortgage banker and look out for your options:
A mortgage banker will help in determining the right options based on your financials. And everyone has their own ideas of running a loan, some want a quick payment and some have fixed EMI options. So discuss in details about these options.
10. Home appraiser:
Has the home appraised by a third party to give you an idea about the prevailing market value of the home you wish to buy? It is important to find a fair price for the home and appraiser will ensure the same
11. Proceed ahead with the documentation:
The paperwork requires a lot of effort and careful proceeding. A title company will handle and also check if the lender is the documented owner of the property or not
12. Closing the deal:
After the paperwork, it takes a week or more time to finally get the amount released and handover to proceed. After the check is issued you can move into the new home. Be sure to get it insured in most adequate of the plans possible as we don’t want to add burden to the family in uncertainty.
First Time Home Buyer Guide:
Buying your home for the first time, worry not. We will help you ease off the burden and plan well in advance. Begin by the below steps:
- Is it the right time to buy a home. Well, it truly never is and also it always is. For every situation and person, there is a fair time. You have a wedding planned then don’t try to buy a home before sorting the finances post wedding.
- Budget: Say for eg you want to buy a $100K home, so you need at least $20k of down payment and some $5k more for miscellaneous. Begin planning the budget well in time
- Don’t rush: Buying a home must never be done in a jiffy but a careful and planned effort needs to be taken in the right direction.
- Don’t offer too much and don’t delay too much: Check the fair appraisal price and be sure to offer at the right time to not miss any good offer
- Never overestimate your financials: You may have ample but when it comes to stepping by step payment of EMI’s it gets tough for people living from paycheck to paycheck. So adopt the habit of having at least 5-6 months of EMI’s saved in your account at all times.
First Time Home Buyer Tips and Advice:
1. Work up your credit score way ahead. It is important to get great deals and also be able to show your financial credibility.
2. Get your credit reports from registered parties
3. Start paying off your dues well in advance at least 6-8 months ahead of your planned property procurement. This will enrich your credit score.
4. Learn to make EMI payments easier: As you are looking for a home already so start saving a rough amount every month to make the transition to the loan easy and smooth
5. Savings are a great habit. When you save ample it speaks highly of your financial health. For a rule of thumb, the average savings must be at least 20% of the yearly income.
6. Reduce your debts and consolidate. Too many loans and debts make the credit score poor so be sure to clear off all the unimportant debts well in advance to enrich your credit score
7. Debt to income ratio must be in check. And over 50% ratio shows poor liquidity and purchase capacity financially.
8. Start visiting open houses for learning more and more.
The above compilation on Financial guide to buying a house is to help you plan ahead, research carefully and manage finances well to pick your most feasible, viable and optimal dream home.
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