You?ve finally decided to take the plunge and buy your first home. While the journey may feel terrifying and confusing, there are some basic steps you can?and should?take before hitting the pavement in search of your future home. Instead of feeling overwhelmed you can arm yourself with the knowledge you?ll need to make informed decisions as you begin your path to home ownership.
Becoming educated in the common practices in your area is the absolutely number one objective on your list. Pick up the phone and call local real estate agents, bank loan officers, and mortgage brokers. Be warned, some will attempt to coerce you into making an appointment?this is not necessary at this stage?and is their way of getting you to sign an agreement you are not ready to sign. Explain clearly that you are in research mode only and need no more than 15 minutes of their time to get your questions answered. It?s important to talk to several professionals as different perspectives and viewpoints will give you a broader spectrum of information in which to base your decisions on.
What to ask
1.Find out what disclosures (facts that materially affect the value of the property) the seller is required by your state to disclose. This varies state to state, so it is extremely important you know what your state laws mandate. Realize that in most cases, the seller is only required to disclose information he/she already knows about the property. What this means is the seller is not obligated to hire professionals, but is required to disclose in ?good faith? any personal knowledge on the property which may affect its financial worth.
2.Ask about standard home inspections. A standard home inspection will give you information on the physical structure itself and the systems inside the home. You need to know what the average cost is in your state, who usually pays for it, and when it is commonly done. Most standard home inspections are paid for by the buyer, but sometimes the seller will split the costs. If you?re in a repressed market or the homeowner is anxious to sell, he may pay for the inspection fully.
3.A title search will have to be performed to rule out any issues with the deed of the property. Who conducts this search and what is the average cost?
4. What are other potential costs you should be aware of? Taxes, settlement agent fees, and commissions are just a few of the ?other? costs you should ask about.
5.It?s also a good idea to find out the average amount of time it takes for a loan to close once an offer has been accepted. This can, and will, vary, because often it has more to do with the personal preferences of the buyer and/or the seller. Be aware of potential time sinks before you begin your search.
6.If you do choose to use a real estate agent to assist you in locating your future home, find out if they?ll help you compose an offer when you?re ready to make one. If they use a standard form, find out if you can get a copy for your own reference. Always be informed on what the agent is giving to the seller.
What?s next?
Get a copy of your credit report, from several sources if possible, and make sure it is correct. If there is incorrect information on your credit report, contact the reporting credit agency and ask for a dispute form. Once you receive the form, fill it out and send it back certified with return receipt requested. When applying for loans your credit score will be the determining factor in getting you the lowest percentage interest rate possible. Make sure the information is factual and then work with what you have. A low score does not mean you can?t buy a house. If this is a concern of yours, find out what programs are available for less than perfect credit.
How much can you afford? You may already know this, but if you don?t, figure it out. The standard rule is your mortgage payment, taxes, and homeowners insurance shouldn?t be more than 28% of your gross income. However, this still may be too much, depending on your other financial obligations. Be honest with yourself and what you can afford to pay out each month. Consider any possible extra costs with home ownership; i.e. new appliances, new carpet, landscaping, and normal home maintenance. Don?t dig yourself into a financial hole you may not be able to get out of.
What type of loan should you get? This is not an easy question to answer, and the best course of action is more research. There are multiple mortgage internet sites you can start with to educate yourself on the types of loans available. In fact, you should definitely pick up the phone once again to make sure you completely understand the loans you are considering. Mortgage brokers and bank loan officers want your business?they will be more than happy to answer your questions and even send you specific loan information.
With this basic, yet important, information at your disposal; you are ready to begin the search for your future home. Always remember that knowledge is key in every aspect of purchasing a home, do not be hesitate in getting the facts you need in any area of the process. Ask questions, be informed, and you will arrive at the other end the confident owner of a new home.
? Copyright: Tracy Leigh Ritts
http://www.TracyLeighWrites.com
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