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Aug
07
10 Easy Steps to Home Buying Financing

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10 Easy Steps to Home Buying Financing

Although financing a home can sometimes seem complicated, really, it isn’t! Just read these 10 easy steps toward gaining financing for your next home purchase. Always consult your local REALTOR® for guidance as well.

STEP 1: Do Some Research

Real estate websites, newspapers, magazines and blogs can offer important information on market trends. Keep a logo notes about property you may be interested in buying and note any changes in asking prices. This will give you a sense of specific market trends.

STEP 2: Select the Correct Realtor®

Realtors® are a significant partner when buying or selling a home. These dedicated professionals can give you with excellent feedback on homes and neighborhoods that isn’t easily available. Their knowledge of the home-buying process, negotiation, and detailed familiarity with the area you want to live is extremely valuable. Best of all, it won’t cost you anything to use a Realtor® because they are compensated through commission from the seller.

STEP 3: Decide How Much House You Can Afford

Lenders generally state that buyers seek homes that cost no more than three to five times their annual income. This applies if the buyer places 20% down and has a moderate amount of other debt. This determination should be made based on your own personal financial situation.

STEP 4: Gain Pre-approval and Pre-approval for your mortgage

Determining how much you can actually spend on a home first is critical to the home buying process. To get pre-qualified for a mortgage, you’ll need to gather financial information for your mortgage banker. Items like: income, savings, investments, and assets will all be gathered by your lender to determine how much they can lend you. Later, you can get pre-approved for credit, which involves providing your financial documents: W-2 statements, paycheck stubs, bank statements, etc. This will allow your lender to verify your financial status and credit.

STEP 5: Visit Many Homes and Make an Offer

During the home-buying process, it’s important to visit many homes for sale in your price range, not only the one home you “think” is the one you will purchase. Make sure you take notes on each house - the pros and cons of each. You may also want to take photos or video. Take plenty of time to evaluate the homes, considering all elements of the neighborhood and the home itself. Then, work with your Realtor® to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once an agreement has been made on price, the house will go into escrow. (This is the period of time it takes to complete the home-buying process).

STEP 6: Gain a Home Inspection

Typically, offers are contingent upon a home inspection that check for signs of any structural damage r other items in need of repairs. your Realtor® can help you arrange for the inspection, it should occur within a few days of your offer being accepted. This contingency can protect you by allowing you to renegotiate your offer without penalty, should the inspection come back unfavorable. You will receive a report that outlines the home inspector’s findings. At that time, you can have your Relator® request that items be repaired or negotiate and new offer based not he amount of repairs needed. You will be able to ensure the repairs have been completed during a walk-through of the house before the sale closes.

STEP 7: Select Your Loan

Lenders have a wide-array of competitively priced loan programs. You should write any detailed questions down and work closely with your mortgage banker to get answers. Mortgage bankers should be responsive, organized and experienced. Each home buyer may have different requirements for the type of mortgage banker they use for their home loan. It’s important to select someone you trust to make the process as easy as possible.

STEP 7: Don’t forget Your Appraisal!

Make sure you get an independent estimate of the value of your home through a home appraiser. This appraiser should be a member of a third-party company and should not be associated with the lender. The appraiser’s report will show you if you’re paying a fair price for the home.

STEP 9: Organize Paperwork

The home-buying process is notorious for involving a ton or paperwork! Your lender will arrange for a title company to help. Title companies ensure that the home is being bought by the rightful owner, YOU!

STEP 10: Organize Paperwork

During the closing, you will sign the paperwork that is required to complete the home -buying process. It can take a few days for the loan to be funded to you. This occurs after all the paperwork is received and reviewed by the lender. Once the seller receives their check - you can move into your new home!


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