The Buying Process. Are You Ready?
Get Ready for Home Ownership
- Starting early, build a good credit history
- Find out what type of mortgages you quality for
- Get mortgage pre-approval
- Prequalifying for a mortgage helps you determine how much you can afford and is strongly recommended. Most lenders require that your monthly mortgage payment, including principal, interest, taxes and insurance, range between 25% and 28% of your gross monthly income. Remember, being prequalified does not necessarily mean that you will be approved for a loan; preapproval does. Preapproval means that you have provided the lender with the necessary paperwork, and he has approved your actual loan amount. A letter of preapproval significantly strengthens your offer. Being preapproved for a home loan puts you in a much better negotiating position because the seller knows that your financing is not in question.
- Familiarize yourself with all contracts and agreements associated with the home buying process
- I can provide samples for you early in the process
- Save up for a down payment which is typically 10-20% of property’s value; if FHA-qualified, it may be less
- Consider closing costs which can include taxes and transfer fees
- Consider utilities and monthly bills, such as homeowner’s assessments
Find the Right Property
- Determine what is important to you, such as particular schools, neighborhood amenities, monthly mortgage payment, public transportation, walkability, etc.
- Make sure you include home owner’s assessments, utilities, and taxes when calculating the monthly mortgage payment
Finance the Property
- Contact your mortgage broker or lender
- Make sure you understand the financing terms—ask the lender for clarification, if needed
- Although I am always happy to support you in the lending process, your relationship with your lender is vital to a seamless transaction
- I will order a Preliminary Title Search to ensure there are no clouds on the title
Make an Offer
- Once we have found a home which fits your needs, I will compile the appropriate legal forms and contracts to make a solid offer on the property. I will help you put together an attractive offer package that takes into account the market value and condition of the home and your financing terms.
- Read all contracts before signing—make sure you understand all of the terms, ask questions
- Place a competitive bid and be prepared to make a counter-offer
- Keep your credit score stable and in-check by waiting to purchase any big-ticket items until long after the closing
- Only one offer will result in a sale, so be prepared to move on if your offer is not accepted
- Once your offer is accepted and a closing date is agreed upon, I will coordinate the completion of the purchase and submit of all necessary forms to your selected escrow company. I will monitor the escrow process until the transaction is complete.
- Escrow is an independent neutral party that protects the interests of all parties to the transaction. It’s function is to ensure that all conditions of the sale have been met before property and money change hands. Escrow independently manages all funds, instructions, and documents for the purchase of your home, including your down payment, your lender’s funds, documents for the new loan, hazard and title insurance, inspection reports, and the grant deed from the seller. At the close of escrow, the “escrow holder” delivers these items to the appropriate parties, disburses the funds, and handles the associated paperwork.
- Set up utilities bills in your name to begin on the date of closing, maintain files
- Set a move date and hire movers or plan a move party with your friends
Closing and Life After the Big Purchase
- Protect your new asset by obtaining insurance such as homeowner’s, flood, earthquake, disaster, and fire
- Maintain files—digital or print—for all warranties, insurance documents, contracts, etc.
- Keep original closing documents in a safe place, preferably outside the home (such as a safety deposit box)
- Implement desired aesthetic changes such as painting, minor construction, and re-flooring
- Get to know your neighbors and explore your new neighborhood
- If you’re happy with my service, please be sure to recommend me to your neighbors (new and old), friends and family