What Real Estate Buyers Need to Know
When you’re ready to purchase your first home, you’ll likely need to do some research. Unfortunately, buying a new home isn’t as easy as picking out which one you want and putting in an offer. You’ll have to recognize your financial health, find the right professionals to work with, and understand the purchasing process. Luckily for you, a little research goes a long way in putting you on the path to purchasing your first home.
Before you go to the trouble of your new home search, you need to make sure you are financially prepared. In most cases, the initial question is regarding your job and the length of time you have worked there. Most mortgage lenders will look at a period of several months for those on a salary, but hourly wage workers and those on self-employment may have to wait until they’ve been on the job for around two years.
The next consideration is your budget. Calculate your expected monthly bills, including utilities, homeowner’s insurance, mortgage, and HOA fees along with the other monthly bills you are paying. This will help you figure out how much house you would be able to afford. Finally, you need to look at your spending habits. Your bank statements and your credit are what the mortgage lender will examine to determine whether you are mortgage material. There are a range of programs with different requirements. A mortgage broker can be key to finding you the best choices and helpful suggestions to improving your chances.
When you are ready to get your preapproval, you should take time to research different programs currently available for first-time homebuyers. There are national advantages, like a USDA or FHA loan, as well as state and local grants that you may qualify for. These programs are beneficial to those struggling to come up with a down payment and closing costs. Another positive opportunity to take advantage of is tax credits available for first-time homebuyers. Don’t forget to find out about and apply for these.
After you’ve gotten your preapproval, it’s time to start house shopping. A licensed real estate agent can help you with the process of searching for homes that meet your criteria, setting up showings, and putting in your offer. Since there are many laws regulating real estate, it is always a good idea to bring in an experienced professional who can steer you in the right direction and make sure that you don’t get taken advantage of.
Once you’ve found a home you love and the seller has accepted your offer, you will most likely start the home inspection process. If anything is found to be faulty or not up to code, you can request that the owner fix these items. They’ll either agree to do so, or you may have to be prepared to move on. Certain mortgage programs will not allow for closing when a property has certain defects that could cause health and safety concerns. Once all is fixed accordingly, you will go to closing and prepare to move into your new home.
Working with an attorney to ensure that the contract is written correctly and that all of the legal steps are taken will help keep you out of Court and conflict. Remember, buying a house is the biggest financial decision most people make in their lives.
If you’re gearing up to make your first home purchase, it’s important to understand the process and requirements you will face. Hiring professionals to help guide you through the steps and hurdles you may face will bring you peace of mind and ensure your new home will be a good investment.
James Schroeder is an attorney licensed to practice in Ohio, Pennsylvania, New York, New Jersey and the District of Columbia and maintains an office in Sardinia.