Buying your first home is simple but not easy. You find a home and you pay for it, right? Wrong! Here are a few steps you need to take to have a successful home purchase, and some tips along the way.
Step One: Save for your down payment.
It’s is no accident that a lot of people look to purchase a home at tax time. With a tax refund and two to three paychecks you will be well on your way to saving for your down payment. And, common mortgages today require a lot less down to get into a home.
Conventional Mortgage - 5%
FHA Mortgage - 3.5%
VA Mortgage - 0%
Tip - Have your realtor negotiate credit at closing to further reduce closing cost.
Step Two: Talk to a Mortgage Broker
There is no use in looking at homes you can’t afford, but how much can you afford? There is only one way to find out. Talk to a mortgage broker. To prepare for your meeting you should have these things available.
3 most recent employment check stubs
3 most recent saving, checking, and 401k statements
Previous 2 years federal income tax returns
Previous 2 years past W-2
Tip - Have your mortgage broker provide a pre-approval to submit with your offer.
Step Three: Start shopping.
The truth of the matter is most people start shopping for a home on line. This is a great start, but it doesn’t help to focus on needs and wants. Meeting with a REALTOR gives you an opportunity to explore your needs and wants and determine what’s available in the neighborhood you desire.
Tip - You’re never going to get 100% of what you want, so discuss with your REALTOR what can you compromise on.
Step Four: Submit a contract.
You found the home of your dreams, so now you have to submit a contract to purchase. Your offer is going to be based upon fair market value. The best method to determine fair market value is to determine how much are similar homes have sold for, not listed for, in the area. But remember, a home is only worth how much you are willing to pay.
Tip - There are hundreds of details before, during, and after the contract. Make sure your REALTOR keeps you abreast of what’s going on.
Step Five: Close
Contract accepted, mortgage approved, you’re going to the closing table. Congratulations, you have bought a home!
Simple, right? Wrong again. Although this is only 5 steps, there actually are hundreds of details that have to be addressed.
Final Tip - Contact me today and let’s sit down and prepare a strategy for your next home.
Originally posted on Linked In 4-19-2019