Buying house is a tedious process and finding a guide that shows the house buying process step by step can be just as difficult as anything. Need not worry any longer as a comprehensive guide has been crafted to help you understand the complete step by step process of buying a house;
- Budget and how much you can afford
The first step in the process of buying a house is determining how much you can afford, and creating a budget based on this. A budget is the single most important thing to do because should you fail to make one that is reasonable, achievable and manageable, you run the risk of falling into debt which, in the worst cases, can even lead to you losing your home.
A majority of lenders recommend that when creating a budget for home buying, buyers should not consider homes that cost more than three to five times the annual income of the household – and that is if one decides to put a down payment of 20 percent.
- Research your options for houses
While the process of buying a house steadily starts, one thing to do is research the options of houses available to you. This process is made simpler with the help of a budget – as you now know what it is exactly what you are looking for.
This can be done by checking through websites, newspapers, and magazines that have real estate listings. Keep an eye on the prices and make note of possible changes in the area where you would like to buy a home.
- Save a down payment
Once you have a general idea of the house you want, its price and possible fluctuations, the third step in the process of buying a house is saving a down payment. While many prefer to save very little for the down payment – or choose to get the down payment on the mortgage, this is not advised. One should aim to come up with and save 20 percent of the price of the house to be used as a down payment. Putting aside an amount of money every month will positively add to your down payment savings.
- Get pre Approval for a mortgage
Prior to seriously looking for a home to buy, you should get you mortgage pre-approved – after all, you don’t know how much you can spend yet. Mortgage pre-approval mainly consists of providing your mortgage banker with documents such as; your income and the amount of saving and investments that you have.
This information will allow the lender to determine how much they can lend you – which will then allow you to know the home prices you should be looking at.
- Find a Real Estate agent
As mentioned earlier, the process of buying a house is a long and tedious one and while some may decide and opt to wade through it alone, this may not be for you and is advised against. Real estate agents are an essential part of both buying and selling houses – they provide you with critical and essential information that you would struggle to find elsewhere.
On top of this, their knowledge and experience with the process of buying house can be helpful and beneficial to you and the buying a new house process – from negotiating to knowing the best neighborhoods and often hidden pitfalls of others. The cherry on top to using real estate agents is that it does not cost you, the buyer, anything as the agent will be paid by the seller of the home.
- Get a Lawyer
One aspect of the process of buying a house that often gets overlooked is the hiring and use of a lawyer. Buying a house is hardly as simple as it pretends to be – it involves heaps upon heaps of paperwork and legal jargon that would easily confuse an ordinary human being that is not a lawyer.
Lawyers will help you wade through this, and simplify the step by step process of buying a house.
- Find the home you wish to buy
With your budget, prior research, a loan pre-approval from a lender, a real estate agent and lawyer in place, it is time for you to find the home that you want to buy. The research done will help you narrow into an area and your real estate agent can further help in recommending better or more suitable areas. All things from traffic in the neighborhood to the pressure of the water in the house should be taken into consideration. This step can either be the longest or shortest in the process of buying house.
- Get the Home inspected
A home inspection is generally used to check for any structural or material damage and once the inspection is complete, both the home seller and buyer get a report. For the buyer, this report gives one the opportunity to either withdraw from the purchase – without penalties or ask the seller to fix the home prior to the close of the sale.
- Get the home appraised
The home appraisal is done by a third party and is a small but important part of the process of buying house which is mainly for letting everyone know that you a paying a fair price for the home.
- Complete all the required paperwork
The tenth step in the process of buying house the lender will normally arrange for a title company to manage the paperwork and ensure that the seller is the rightful owner of the house.
- Closed deal!
This step in the process of buying house is where the lawyer is probably most involved in. A lawyer will help you finalize all pending paperwork, dot the I’s and cross the t’s as well as ensure all papers are appropriately signed.
Once all this is done, and the check is delivered to the seller, you can officially move into your new home!
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