For most individuals, this is the biggest financial transaction they make. Therefore, making the right decision at the first time is important. Buying a house can sometimes be as boring as a bunch of rules. Fortunately, you can realize your dream of becoming a homeowner in a quick and easy way, provided you have the right knowledge and methods.
Step
Part 1 of 4: Financial Management
Step 1. Strengthen your credit
The higher your FICO score, which ranges from 300 to 850, the better the interest rate you earn. This is a very important thing. The difference between the 4.5% mortgage interest and the 5% mortgage interest can mean “ten thousand dollars” over the life of the loan.
Ask for a free copy of your credit report so you can see what lenders see in your credit history. Pay credit card and solve all credit problems
Step 2. Ask for pre-approval to get the amount you can pay
Apply to multiple lenders within two weeks so the checks don't jeopardize your credit report. Do this “before” contacting a real estate agent so you are firm in your abilities, and you don't fall into an accident with a home you can't afford to pay off.
- The seller “pleases” the buyer who has obtained pre-approval. Buyers who have obtained initial approval almost always get the green light from creditors, meaning there is only a low risk of canceling the deal.
- Do not get pre-qualification, not pre-approval. The two things are different. Pre-approval means that lenders usually prepare to grant you a loan after viewing your financial statements. Early qualification simply means that the lender "estimates" what you can borrow. This does not mean you will get a loan.
Step 3. Sell your mortgage
Wait – why should you sell your mortgage before deciding to buy a home? Isn't this the complete opposite? Not necessarily. Selling a mortgage before you decide to buy a home can be profitable for one of the main reasons:
- You will know exactly how much money you can borrow “before” you buy a house. Many people have an emotional attachment to a particular home but they cannot own it. They struggled to find a mortgage that could cover the price of the house. Finding a mortgage early and a house second is less tempting, but it's doubly smart. You will soon be able to tell if the house is within the price range or not.
- Think about the type of down payment you can afford to pay. This becomes part of your mortgage calculation although you don't need an exact calculation when you sell the mortgage. Have a general idea. This will be discussed more in this article.
- Search and find comparisons that lenders use to determine your qualifications for a loan. The comparison that is often used is "28 and 36". This means that 28% of your gross income (before you pay taxes) must cover the cost of the home you are planning to buy (including mortgage principles and interests, such as housing taxes and insurance). Credit payments each month, when combined with cash outlays, should not exceed 36% of your gross income. Find the percentage of your gross monthly income (28% and 36% of $3750 = $1050 and $1350, respectively). Your monthly payments on outstanding credit cannot exceed the difference between ($300) or else you will not be approved.
Step 4. If you qualify, first check the programs available to buyers
Some often offer lower down payment requirements. It is offered by several state and local governments. You may also be able to access up to $10,000 from a 401(k) or Roth IRA without penalty. Check with your broker or an employee in human resources for specific information regarding the loan of the asset in question.
Step 5. Speak up and hire a lawyer (optional)
If you're looking for an easy, hassle-free home buying process, then you probably just need a realtor, notary, and maybe a mortgage broker. But once again you have to remember, when everything can run smoothly according to expectations. Hire an honest, reputable, (relatively) cheap lawyer if:
- Lawyers' fees are a fraction of your budget compared to the total you spend on your home.
- The house you purchased is under foreclosure or litigation, which means that it has been distributed as part of the estate of the deceased individual.
- You suspect the seller may be trying to break the deal easily or you don't trust them.
- Your state requires an attorney to terminate the home buying process. Six states currently require the presence of a lawyer. Speak to your state's housing commission to find out if this is a common process in your state.
Part 2 of 4: Buying a House
Step 1. Find a good real estate agent to represent you in the search and negotiation process
Real estate agents must be: friendly, open, attractive, calm, confident, and qualified. Learn about agency rates, methods, experience, and training followed. Look for a realtor who lives in the area, works full time, is successful in the process of buying several properties each year, and has a good reputation.
- Realtors generally work for sellers, but this is not a bad thing. A realtor's job is to connect individuals who want to buy and sell a particular home. Therefore, the realtor has an interest in selling the house. A good realtor will use his experience to sell the “right” home to the “right” buyer – that is you.
- When you find a realtor, provide full details when you describe the home you want – the number of bathrooms and bedrooms, the garage that connects to the interior of the house, the vacant lot and anything else important, like good lighting or the size of the garden for the kids. child.
Step 2. Enroll in the MLS standby service to search for properties in your neighborhood
Multiple Listing Service will give you an idea of the market share in the price range you expect. Your agent can also do this for you.
If you register through a real estate agent, this is a poor way to contact the registered agent to see the home in person. Don't ask agents to do this unless you plan to have them on your behalf – they won't be paid until the client buys the house and it's unfair to ask them to work unpaid, knowing that you won't be using them to buy your home
Step 3. Start looking for homes that are within your budget
Ask a realtor to start work, but let them know what budget you have. The general rule here is that you can buy a house for 2.5 times your annual salary. For example, if your annual salary amount is $85k, you can set aside a minimum mortgage of $210k and possibly a larger amount.
Use an online mortgage calculator to start crunching the numbers, and remember past mortgage purchases. Keep that number in mind as you prepare to find your new dream home
Step 4. Start thinking about whether you are really looking for a house
You may already have doubts, but get your finances detailed. There are a few things that you and your family should consider carefully:
- What do you and your family need in the next few years? Maybe you're just a husband and wife right now, but are there any plans to have kids? A house that is only suitable and comfortable for two people will be less comfortable for three or four people.
- What sales do you want to make? In other words, what are your priorities? Although we believe that buying a house is a good thing, it is often a great torture when we are forced to compromise. Are you concerned about cozy neighbors and good schools over big backyards? Do you need a large, usable kitchen instead of a big, luxurious bedroom? What will you sacrifice when you have a time of crisis?
- Do you expect your income to increase over the next few years? If your income has increased by 3% over the past few years and you have a secure job in a comfortable industry, you can probably rest assured that buying an expensive, but still reasonable mortgage is a possibility. Most homebuyers buy houses at relatively high prices, then develop into mortgages within a year or two.
Step 5. Determine the environment you want to live in
Look for available homes in your neighborhood. Look at prices, house designs, proximity to shopping, homes and other amenities. Read billboards, if available, and talk to locals. Look at the house and its surroundings and conditions near the house to make sure you don't buy a house that only sparkles in your eyes.
The area around the location of your home is sometimes a major consideration compared to the condition of the house itself, because this will affect the sale value of your home if you are going to resell it. Buying a suitable home-higher than a good neighborhood can be a good investment, and enabling you to identify and join a community – where many individuals want to live – can lead you to offer property purchases at a reasonable price
Step 6. Go to some home shows to gauge market share and see what you want
Pay attention to the overall picture, number of bedrooms and bathrooms, kitchen facilities, and storage. Visit properties that really catch your eye at different times to check for traffic jams, parking availability, noise levels and activities going on. Peaceful neighbors at lunchtime can be noisy during busy times, and you never know it if you only visit them once.
Step 7. Look at the comparison of houses around your house
If you are unsure of the price of a home, use a local appraiser to rate your home, who will also look at comparisons. When appraising a home, appraisers will compare homes in areas that have similar features, sizes. If your home is more expensive than other homes, or the appraiser finds the home in a different area or further away 1⁄2 mile (0.8 km), be careful! Never buy the most expensive house in the neighborhood. Banks may thwart home financing, and you may never see your home priced accordingly. If you can afford it, buy a slightly more expensive house in your neighborhood – because nearby houses sell for a higher price than what you paid for, your home's value will increase.
Part 3 of 4: Making an Offer
Step 1. If possible, adapt your offer to the seller's conditions
It's not easy, and often impossible, but it's harmless to try when making the biggest purchase of your life. Here are a few things you should keep in mind about your offer:
- What does the seller provide in terms of financial prospects? Are they in need or are they waiting for cash? Sellers who are short of cash will be more than happy to take offers to reduce the given price.
- How long has the house been sold? Homes that have been sold for a long time can be bargained for at a lower value.
- Have they bought another house? If the seller is not currently living in the house they are selling, it will be much easier to bid at a lower price than you might imagine.
Step 2. Look at the price comparisons when you make your offer
Do nearby houses also have a similar price (“price offered”), and what do they sell there? If homes in the area are regularly selling for about 5% below the asking price, think about making an offer that ranges from 8% to 10% below the asking price.
Step 3. Calculate the expenses for your home
Consider the annual housing tax and insurance value in your area and the average home price you're trying to buy. Also consider how much money you expect to pay off. (This ranges in varying amounts which usually ranges from 3 to 6 percent of the money you borrow. Credit institutions often offer lower repayment rates to their members.) Enter the total amount on a mortgage calculator (you can find one online or make your own.) If the result is above 28% of your gross income (or whether a low percentage is used by lenders in your situation) then you will have a hard time getting a mortgage.
Determine if you need to sell your old house to get a new one. If necessary, buying a new home is very dependent on selling the old house. A dependent offer carries more risk and is less expected by the seller, as the sale cannot be completed until the buyer's old home is sold. The first time, you may want to put your old home on the stock market
Step 4. If you really want a house, be prepared to make an offer above the asking price
Market availability and demand are usually coercive. If many individuals are competing for a small number of homes, be prepared to bid as high as possible. Some homebuyers don't believe that you're still holding on to your highest bid, but you can easily find that you can beat the other offers and they never get a chance to bid on your home. If you want to give yourself the best in your home that you really want, make a high bid.
Step 5. Speak to your realtor when you are ready to submit your offer
While the instructions for bidding may vary from state to state, this is usually what happens: You submit your offer to a broker, who then presents it to the seller's representative. The seller then decides to accept, reject, or make the opposite offer.
Enter a down payment with your offer. When you've agreed to an offer, you're formalizing it in the paperwork, which means you're either committed to buying a house or forfeited a deposit, unless you don't get the final mortgage approval or something happens during inspection time, which you can't accept. As long as the paperwork is held by a third party (usually 30 to 90 days), your lender draws up financing for the purchase and approves your mortgage
Part 4 of 4: Breaking the Deal
Step 1. Determine how much down payment you need to get the deal
The down payment represents the fair value, or ownership of the house. The money is also money that does not need to be subject to interest. The more down payment you can afford to make or buy your home, the less money you'll need to pay off your home payments.
- You are expected to provide 10-20% of the agreed “value” of the house. Note that the value of the house may be higher or lower than the selling price of the house.” For example, if you have a down payment of $30,000, you would use it for a down payment on a house of between $300k (10%) or $150k (20%). Budgeting a smaller amount often, but doesn't necessarily require you to pay for private mortgage insurance (PMI), which increases your monthly expenses but is tax-deductible.
- If you can't make a 10%-20% down payment on your home, but have good credit and a stable income, a mortgage broker can help you with a combination or FHA mortgage. So you take out the first mortgage for up to 80% of the value of the house, and the second mortgage for the remainder. Even if the second mortgage rate is slightly higher, the tax-deductible interest and combined payments should still be lower than the first mortgage with PMI. If you're buying a home, consider the Nehemiah Program to get help with your down payment.
Step 2. Ensure final approval can be estimated with a convenient home inspection
Request the following surveys and reports: house reviews, stars, termites, radon, hazardous materials, climbs, floods, earthquakes, and crime rates. (In general, it will take you 7-10 days to complete the inspection – make sure that your agent explains everything fully when signing the purchase and sales contract.)
- The cost to review a home ranges between $150 and $500, depending on the area, but doing so can prevent a $100,000 mistake. This is especially true for rya homes, as you want to avoid additional expenses, such as paint, asbestos insulation, and mildew.
- If you are using the results of the review to bid on the house price, do not attribute or include it in your contract. The lending institution will ask you to provide a copy of the results of your review, which will invalidate their evaluation of the assessment.
Step 3. Have a complete home inspection and ensure that the contract is contingent on the results
Getting a home inspection is an important part of the home buying experience. Without knowledge of the value of the house being offered for profit as well as its true value it can be a financial disaster that will occur. Homebuyers make “guesstimates” when figuring out a new home purchase budget. These estimates can be significantly wrong and put the family in a bad financial position.
Step 4. Save the agreement letter
A letter of agreement is usually drawn up at a notary's office and involves the signing of documents relating to the property and a mortgage agreement. One package of papers includes the deed, agreement that you are the current owner of the home, and title, which shows that no one else can sue or fight against it. If there are still problems, money can be omitted in the agreement letter until the problem is resolved, which will be used as an incentive to the seller to fix the problem quickly with the aim of receiving all ownership rights. If the problem persists, money can be set aside in the agreement document until the issue is resolved, which acts as an incentive for the seller to fix the problem quickly and accept all that is given.
Consider using your civil attorney to review closing documents and witness your closing. Remember, a realtor is not capable of giving you legal advice. You may have to spend as much as $200-$400 to pay a lawyer in a short time, but they are paid to supervise you
Tips
- Make sure that you have some money saved before you start looking for options for homes to buy!
- Try not to make a choice on a particular property. It's a good thing to find exactly what you need, but if you have an emotional attachment to a home, you'll be paying more than the price tag because you have an emotional attachment. Agreements are also subject to change. Increase the desire to move to see another house; There is no perfect home where the seller can provide what you want.
- Never take a measuring device and start measuring a room! It can let the realtor know that you are emotionally attached and charge a certain price!!!
Warning
- The seller won't let you do a home inspection because there's something to hide – walk!
- The current state of the economy is quite bad, some individuals say that this is a good time to buy homes (home prices are cheap) but other individuals say it is a bad time to enter into home sales. Discussion and considering all advice before buying a house is now highly recommended.
- Be careful of real estate agents who are in a hurry to sell property. They may be aware of a bad event, such as a market share crash. Try to look for offers that are not commonly provided by agents.
