Sometimes the thought of buying your first house can be super intimidating because you don’t know what to expect! Here are a few things to help you make the process easier. You’ll know the steps, tips and money goals you should set.
Talk to a Mortgage Lender
The very first thing to do is talk to a mortgage lender. They are the ones who will check your credit and salary patterns. Based on what they find, they will tell you how much you can afford on a house.
Something to consider when you talk with the lender is how much you can afford right from the beginning. They will ask you to pay a down payment of a certain percentage. Some mortgage companies are only asking for 5% down. However, instead of thinking that only paying a 5% down payment is better, think instead that it’s not a good thing. During the 2008 economic crash, mortgages were only asking homeowners to pay 5%. When the economy crashed, they lost their homes because they only owned 5% instead of a normal amount of 20% or more. The more equity you can afford up front, the better!
Use Devices to Find a House in Your Price Range
After settling the price with the lender (which is free to do), you will then find houses in your price range of the loan! You can do this by any mean you like. Zillow, Realtor.com, Dweller, Doorsteps Swipe, the list keeps going.
Ask a Real Estate Agent to Do the Work for You
Having an actual Realtor is helpful because those websites and apps aren’t always accurate with prices or listed homes. Realtors are free to the buyer and keep your home desires in mind as they look at current listings. Then they take you to see them. Their job is to answer any of your questions.
Inspect the Home
Once you put an offer on the home you love and is in your price-range, most states give you 10 days to back out. During those days you have an inspector come and look at it to make sure it’s a decent home to live in, etc.
Amount of Time to Close on a Home
The time it takes to close on a house depends on if the mortgage pre-qualification is done before you really begin looking. If you have cash, it takes a week or two. Dealing with a mortgage company takes about 30-35 days depending on your situation.
Sign Contracts
The last thing you’ll do is sign contracts. The real estate agent is helpful at this point because they are the experts in finalizing contracts. Hypothetically, they hold your hand and make sure everything is done legally and correctly. They help you understand what else needs to be done to finalize buying a house. Once it’s in your name, you are a homeowner!
Money Tips
Here are some final money tips as you begin planning the adventure of owning a home.
- Once you know the pre-qualified amount that the lender gives you, use your credit card intelligently. Don’t go buying new TVs or new expensive toys. The lender will see your credit change and they will disqualify you from the loan. So, keep that in mind!
- Expect fees to the mortgage company for the money you borrow from them based on their rates. Remember those when planning your budget.
- The Title Company will charge a fee as well. This is worth it in the end because their job is to make sure nobody else owns the house except you once you buy it.
- Most of the money you’ll spend is the amount the mortgage company requires you to put down from the beginning. That’s what you pay up front, which makes it less to pay later. This is when you gain equity in the home. Companies rarely/never lend you the entire amount, so start saving now.
- Costs to fix up the house, depending on the state that it’s in when you buy it, or the outside. If you have the cash to spend on a fixer-upper, then it might be fun to change a lot in a house! However, if you don’t, then buy something that’s already looking good.