Buying your first home is a remarkable achievement and a monumental milestone. Before you jump the gun and sign on the dotted line, there are some things about first time home buying that you should take into consideration.
Clean Up Your Credit
Your credit should be in great shape before attempting to borrow substantial funds for a home loan. If there’s anything derogatory appearing on your credit reports, get those tidied up and taken care of before you begin the home buying process. Cleaning up your credit if you have a negative history could be a time consuming and frustrating process, so take care of that before you even begin looking for your new home.
With a clean credit history and a healthy deposit, you’re ready to seek out pre-approval for your home mortgage loan. Being pre-approved for your home loan is imperative for two reasons. First, by being pre-approved, you’ll know what your budget is for purchasing a house. Second, when you do locate your dream house, you won’t risk losing it to another potential buyer in the time it takes to apply for a home loan. Your home loan may be fixed-rate, meaning the interest and payments don’t change over time, or may be variable-rate, meaning the introductory fees are small, but interest may inflate over time. The life of your home loan may be a ten year, fifteen years, or thirty-year loan, or longer, which will alter your monthly payment amount.
Be Prepared for Additional Expenses
Be prepared with funds on hand for your deposits and closing costs as these items are not covered by your home mortgage loan. Your deposits and closing costs are separate and apart from your down payment.
Call Mark and Debra
You’ll want to find a real estate agent that has strong negotiation skills and knows the current real estate market. Mark and Debra will communicate clearly and efficiently regarding the purchase and processes of closing on your first home. Having their knowledge and experience working on your behalf will lessen your stress. You can reach them at 901-239-6041.
Be Prepared for Competition
Be prepared for multiple offers to come in on the house you select. When you fall head-over-heels in love with a particular house, chances are, so might someone else. You may not be the only person placing a bid on your dream home, so don’t be caught off-guard if your realtor tells you there’s competition. When multiple offers come in on a single property, you’ve got to either up the ante on your bid, adjust your terms, or be prepared to walk away and find another house. Mark and Debra will assist you in navigating through multiple-offer scenarios.
Know the Process
When the buyer accepts your offer, you’ll be asked to make a good-faith deposit. You’ll pay this non-refundable deposit to the broker or attorney, and not directly to the seller. The home is then appraised by a specialized appraiser to ensure the bank lending the home loan that its value matches the asking price.
Once your offer is accepted, a home inspector is called in to look over the entire structure. During this phase, it’s possible the home inspection process will disclose unpleasant news, such as a roof in disrepair, or plumbing that’s not up to code. Don’t be alarmed if the home inspection doesn’t produce perfection. Know that when the home inspection discloses things that are in disarray, the contract is re-negotiated to include repairs or an allowance for repairs, so the home is in good order when you move in. At this phase, you also have the opportunity to back out of your contract if the repairs needed are more than you’re prepared to deal with comfortably.
The seller of the property you’ve chosen to buy may have a home warranty in place to protect themselves and your interests in the sale of the house. A home warranty is purchased separately from a home warranty company and includes repairs to the home at reduced rates by qualified pre-selected contractors.
Finally, your home then goes through a closing process. The title changes hands during the closing phase – and you, as the buyer and new owner, take possession of the property. Congratulations on buying your first home!
Give Mark and Debra a call at 901-239-6041 to talk about making your first home buying experience a positive one that ends with you owning the home of your dreams.