For a first time home buyer the home buying process can honestly be a little overwhelming. Although in reality overall the process is not too difficult there are quite a few major decisions that must be made by the home buyer in the home buying process. Considering each step beforehand in depth is helpful and is important in order to make wise decisions in these somewhat challenging steps to homeownership.
Step 1 :
For a home buyer the first step they should make is to do ample study on the entire home buying process. Fortunately, online just about any topic on home buying that you can imagine is discussed. Other than the time involved in reading the online material this step is really simple by just doing a search on Google, Bing, Yahoo, or any search engine browser. You can find many home buying tips online.
Step 2 :
The next step after doing a lot of online research on home buying topics is to get prequalified for a mortgage loan. This step is not difficult at all really. It is best to reach out to several lenders/brokers when you are in this step in the home buying process. You are looking for the best loan program and lowest interest rate and you may not find this with the first lender that you call. Shopping around and talking with several lenders will help you find the best rate and loan program. The prequalification process is not difficult. You will be asked such things as; how much money do you have saved currently, how much income do you make each month, how long have you been on your job. The lenders will have to pull your credit report to check your credit scores. Having several lenders pull your credit within a very short period of time will not drop your score more than having just one lender pull your credit. Credit companies allow for this without it hitting your credit score negatively.
Step 3 :
Hire a Buyers Realtor to assist you with finding and buying a home. A Buyers Realtor can be EXTREMELY helpful to you in your quest to buy a home. It is again advised to interview by phone or in person several Realtors before deciding which Realtor to hire. This process is somewhat simple. During your interview get a feel for how helpful and knowledgeable the Realtor is to you. Maybe even ask for a few references from the Realtor that you can check with asking them how they would rate their experience with the Realtor.
Step 4 :
Get a home inspection. This is a very simple step in the process as your Realtor can refer you to a licensed home inspector. The home inspection must be paid by you in advance of buying the home. The home inspection will discover the true condition of the home mechanically and structurally. After the home inspection the inspector will provide a full report on the condition of the house. Any issues discovered can then be discussed and required repairs can be negotiated by the Realtors.
Step 5 :
Get an appraisal. This too is a very easy step as your lender is the one that will order the appraisal. The appraisal must also be paid upfront by the home buyer. The appraiser will assign a value to the house. If the home appraises for more than you have agreed to buy the home that is a great thing for you. You have secured a great deal on the house in this case. If the home appraises for less than you have agreed to buy the house for then the seller will either have to lower the price of the home or request a review of the appraisal. If the seller refuses to lower the price of the home the you can walk away from the deal or agree to pay the difference between how much the lender is lending you (no more than the appraised value) and the actual price of the home.
Step 6 :
Get final approval on your mortgage loan. This process is usually not too difficult. Your lender will most likely ask you for a lot of supporting documents to get your loan approved. In this process 3 people are really asking you for things. First you have the Loan Officer asking you for financial and personal documents, then you have the Loan Processor maybe asking for additional supporting documents, finally you have the Loan Underwriter doing the same. It is best to respond swiftly to each request. Do not worry that you are being asked for additional items throughout the process as this is normal.
Step 7 :
Go to settlement and get the keys to your new home. This is also not a difficult step in the home buying process. Other than showing up with a certified check for your share of the down payment and closing costs you really just need to be prepared to sign a lot of paperwork. In the end you will get the keys to your new home.
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