make, but it can be a complex process. Here’s a checklist of the 10
essential steps to help make the process smooth and successful.
1. Ask Your Lender About Available Mortgage Programs: An experienced
mortgage company should be able to work with you one-on-one to determine
exactly which mortgage programs will meet your individual needs and what you
can qualify for based on your personal information. Applicants with higher
credit ratings and/or higher levels of financial reserves generally receive
more competitive mortgage rates. There are state and government programs
specific to first-time home buyers, which offer lower interest rates and
grants toward your closing cost.
2. Research the Terms of the Mortgage: Different mortgage lenders have
varying price structures that can affect the amount that you pay for your
home. An annual percentage rate includes the actual interest rate on the
loan, as well as certain fees and costs associated with the loan. Because a
customer may be paying “points” and other closing costs, the APR disclosed
may appear to be higher than the actual interest rate quoted for the loan.
Not all lenders calculate APR identically; however, it does give customers a
relatively fair method of comparing price on their potential loans.
3. Get a Pre-Qualified Loan Commitment: Even before the house hunting
begins, homebuyers need to determine how much they can afford. Mortgage
companies or other lending institutions provide pre-qualified loan
commitments. Sellers often don’t take an offer seriously unless the
prospective first-time buyer has some assurance of creditworthiness from a mortgage company. Ask your lender for a pre-approval letter to submit with
any offer. This means a full credit report was ordered on the customer so
that a true loan decision can be made the same day a customer applies. This
will provide the seller confidence that the mortgage will be issued and the
sale will be completed.
4. Do Your Home-work: Be sure to go online to sites such as
coldwellbanker.com or www.newenglandmoves.com to check for listings,
neighborhood information, current mortgage information and home ownership
services. The right amount of research will help you to better understand
the marketplace and homes available in your price range when you’re ready to
work with a real estate professional.
5. Make a Checklist: To help make the home buying process a little easier,
homebuyers should create a checklist of the important features they want in
a home. Location and the number of bedrooms and bathrooms are usually
important. Other important questions to answer: What will the commute to
work be like? Are there shopping centers, parks and schools located near the
home?
6. Find a Buyer’s Broker: A buyer’s broker or agent represents the buyer’s
interests and helps identify homes that are for sale and in the right price
range. The broker also can help with such tasks as writing contracts,
negotiating the asking price and closing the purchase.
7. Make an Offer: Once you find the right house, make an offer. Make sure
that your offer is contingent on two items: You’re able to obtain adequate
financing, and you can pull out if the property doesn’t pass the home
inspection and the owner can’t come to terms about how to fix the problem.
Be prepared for counter-offers and further negotiations with the seller.
Make an earnest money deposit, which is a check that you’ll give your agent
to indicate that you’re serious about buying the house. The check will apply
toward the sale price if the deal goes through; if not, you get it back.
8. Hire A Home Inspector: Making an offer contingent on an inspection by a
registered home inspector can save thousands of dollars by avoiding unseen
problems. Inspectors will check the house for any structural damage among
many other items. In the contract with the seller, it should state any
necessary repairs that must be made before closing on the house. Prior to
closing, walk through the house and check that such repairs have been
completed.
9. Buy Homeowners Insurance: Lenders require homeowners insurance to protect
the new homebuyer’s interests as well as their own. There are many providers
so shop around for the best rates.
10. The Closing: This is where the seller and buyer sign settlement-closing
papers to transfer the ownership of the home and all transactions are
finalized. Congratulations, you achieved the American dream and you are now
a homeowner!