Buying a house for the first time is regarded as one of the biggest life achievements. Owning a house is not just a luxury but also a necessity for a comfortable living.
One of the ways you can own a home is to buy it. This saves you a whole lot of stress and time. However, buying a house for the first time can be overwhelming, since there are lots of steps and requirements, plus you might be nervous about making a mistake, an expensive one at that.
But worry no more, this blog post will be a guide to every first-timer in buying a house, so read on.
10 steps to follow in buying a house for the first time
Below are 10 steps for first-time home buyers to follow:
Step 1 – Emotional readiness
Being financially ready before buying a house is a must, however, the emotional part isn’t often talked about. Acquiring a house for the first time isn’t a small feat and so you must be emotionally ready.
Think about your next goals, maybe there will be a need to relocate due to work and so on. These big-picture thoughts can help you to decide whether this is the right time to get the house or not.
Step 2 – Determine your savings
Before searching for a house, you should know your budget, and have an idea of how much you can afford. Make this simpler by knowing how much to save up.
There are a few costs that you must plan for before buying your first home. Such as the down payment, closing costs, and move-in expenses.
The down payment is a fee you have to pay when taking out a mortgage loan. Though most people believe that it shouldn’t be less than 20% of the house price, your down payment can be determined by the type of house, lender, and mortgage loan you choose.
The closing costs are the fees you’ll pay when you close on the sale of a house. In most cases, buyers are the ones that’ll pay the closing costs, but the seller will also need to pay some closing costs too; as commission to real estate agents.
The move-in expenses are the amount you’ll need for moving into your new home and also the miscellaneous expenses, like repairs. and you may need to buy some appliances and furniture too.
Step 3 – Examine your finance options
You’re free from this if you can buy your house on an all-cash offer, but if you can’t, then you need to review your financing options.
Check your credit score
In addition to having a down payment, a first-time house buyer must have a good credit score. When you apply for a mortgage loan, your credit score will determine whether you qualify for any loan, which type of loan you qualify for, and the interest rate. If your credit score is low due to late repayment of debt etc, this can affect the loan taking.
Study the mortgage options
There are a few types of mortgage loans on the market, it’s essential you do some research on them to know the one suitable for you.
Step 4 – Get pre-approved for a mortgage loan.
You need to know the type of home you can afford before searching for it. Getting pre-approved for a mortgage is the best way to do that. To be pre-approved, you need to provide some financial information to your lenders such as your income, and the amount of savings you have.
Your lender will examine the information and tell you the amount they can lend you. This will determine the type of home you can get.
Step 5 – Search for the right real estate agent
Working with the right real estate agent is an important part of buying a house because the right agent will make the house-buying process less stressful. Make sure you interview the agents to find the one that is an expert in the area, understands you, and is a good fit for your needs.
Step 6 – Shop for a house
The real estate agent can help you with choosing a good house for you, but he can’t know your preference for houses, so you should do some research on the surroundings that are suitable for you. You should take into consideration some fees, such as the landlords association dues since they’ll have an impact on your monthly budget.
Also, Weigh the cons and pros of different house types to decide the one best for you in terms of financial and personal needs. The pre-approved letter will also be helpful here as you’ll know which house suits your budget.
Step 7 – Make an offer
You’ve found the right home? Now, you’ve to make an offer. You can work with your agent in deciding what you can offer for the house and the contingencies you want to add or forsake to strengthen your offer.
At this point, the seller can accept your offer if they’re okay with it, reject it if they’re not satisfied with it, or present a counteroffer.
Step 8 – Home inspection and appraisal
If all goes as you want it to and your offer is accepted by the seller, you’ll have to perform a house inspection. You can hire a home inspector to inspect for you, or you can do it yourself. The inspection will reveal any fault in the house.
Also, being pre-approved for your home loan doesn’t stop the lender from doing the appraisal of the house. They’ll check out the house to determine if it’s a good investment and the amount to lend you.
Step 9 – Closing the deal
During Closing, all the parties involved in the house buying come together, like the buyer, seller, mortgage representatives, and others.
You will pay all the fees, such as the down payment, closing costs, etc, sign the paperwork and you officially become a homeowner.
Step 10 – Moving in
The last step is moving in. The move-in fee you’ve set aside will come in handy here. And you’re now a landlord.
Everything is difficult without a guide and so is house buying. Have a less stressful house buying following these step-by-step guidelines.
If you have any questions, don’t hesitate to write to us.