Checklist of Essentials for Home Buying
The purchase of a first home requires home buyers to be aware of essential needs prior to making an offer on the house of their dreams. By understanding these essentials and making a checklist of them, home buyers can save themselves the frustration often experienced when buying a home and save time in the process.
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Obtain Pre-Approval
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Before looking at homes, prospective homeowners need to know how much they can afford to spend on the house. This process involves the home buyers and any co-applicants going to a bank and requesting a pre-approval. The pre-approval lets buyers know the loan amount they qualify for as well as the amount of money required for a down payment.
Know Your Limits
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Just because you were pre-approved does not mean that is what you can afford. Remember to factor in costs such as property taxes, homeowner's insurance and association fees incurred on a monthly basis on top of a monthly mortgage payment. Some lenders automatically calculate some of these fees, while others will not. It is important to develop a budget to know how much home you can afford before you select a home. Lenders use the 30 percent rule. Your mortgage payment including the above fees should not exceed 30 percent of your gross monthly income.
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Understand Mortgage Fees
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When people purchase a home, they incur costs such as closing fees, Realtor fees, legal fees and loan application fees. Request a list of fees from lenders you are thinking of using and talk to your Realtor about negotiating seller-paid closing costs, if possible.
Find a Realtor
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A Realtor and prospective homeowner establish a strong connection during the buying phase. Find a Realtor that you can relate and feel close to, since this individual will be helping you pick out your new home. Meet with several Realtors and get information on their experience, special lenders they have connections with and other incentives they can offer you. Ensure the Realtor you select understands your needs and your budget when you begin the home search process.
Create a List of Essentials
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Before you start looking at homes, develop a clear picture of what type of home you are looking for. Ask yourself questions about what is important. Think about the size of your new home's backyard, especially if you spend a lot of time outdoors. If you prefer a newer home to an older one, write that down. List essentials such as the number of bedrooms, number of bathrooms, square footage and the type of home structure you are looking for, a ranch home, two-story, bi-level, tri-level, condo or townhome.
Negotiations
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A Realtor can do some negotiating on your behalf, but sometimes it is best to speak to the seller on your own when it comes to negotiating things like appliances, ceiling fixtures or even window treatments within the home. Use your Realtor for negotiations regarding the price of the home, closing costs and other items directly related to the purchase price.
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References
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