Article DetailsThe 10 Steps to Home Ownership |
| Date Added: March 22, 2008 07:17:28 PM |
| Author: Curtis Biggs |
| Category: Finance and Mortgages |
| The 10 Steps to Home Ownership 1. Are you ready to buy a home? To determine your housing budget, remember: property taxes, home owner's insurance and utilities! A lender calculates your total housing expense as principal, interest, property taxes and home owner's insurance (and private mortgage insurance premiums and association dues, if any). Check your credit a year in advance if possible, leaving you plenty of time to correct any surprises. You can buy with no money down if your credit is, um... "less than perfect…" just ask how it works. Knowing this will calm the butterflies. 2. Mortgage Pre-approval: Complete an application with your mortgage advisor and review your credit. For each person on the loan, provide: 2 latest pay stubs, 2 years W-2s or tax returns, last 2 months of bank statements, all savings and investment account statements. If down payment is a gift from parents, provide a gift letter. Your Mortgage Advisor or Realtor can show you an estimate of the costs and fees typically associated with a new home purchase in the area. Having a fully verified pre-approval will give you a stronger bargaining position. Don’t accept anything less: it is a waste of time and could hurt you/cost you later. 3. Line up your team of advisors: parents, savvy relatives, Realtor, attorney. Ask folks you know for recommendations to professionals who have done a great job. Working with a Realtor is almost always a good idea. Select people who happily make time for you & return your calls promptly - is your home purchase important to them? Select people local to the area where you hope to buy, i.e. a Realtor from a very different area simply won't know the neighborhoods, schools, etc., the way a local established Realtor will. Your Attorney will review the purchase contract to make sure you are getting the things you want (or don't), can help you if negotiations become troublesome and can also review your home inspection. No one should be insulted that you ask for references. These are your advisors. Listen carefully but make your own decision. 4. It's not just a house, find the right home: What do you need in a house today, and for the future? My website has a helpful wish list to fill out and show to your Realtor. How long do you think you'll stay? People tend to move every 5 years. Does the house have to be perfect or do you plan to remodel anyway? Create and use a summary sheet to keep notes about each home you see. My website has that too. To get an idea of what homes in an area have sold for try free websites like www.zillow.com or www.homevaluecma.com. Don't fall in love with any house until after it is yours, or else you'll pay way too much. 5. Making the offer: You and your Realtor will determine a good starting offer. Your realtor will present your offer to the seller or seller's realtor. The seller may agree, counter or reject your offer. A Buyer’s Agent can help you negotiate. The selling Realtor is responsible by law to get the best deal for the seller. You and the seller will then sign a purchase contract that specifically defines the terms of the purchase and what exactly you are purchasing, i.e. curtains, appliances; credits for repairs, etc. Make sure your agreement includes any contingencies and return of escrow e.g.: the appraisal justifies the price, a satisfactory (in your opinion) home inspection, sale of your current home, obtaining financing. 6. Get a home inspection - really! The professional home inspector takes an in-depth look at the property. This expense may save you thousands in repairs later or help you decide not to buy the property at all. My website has an example check list. 7. Appraisal: It is a formal written comparison and estimate of the property's value in the current local market. It is required by your lender. 2 appraisals are required for jumbo mortgages ($417,000 +) . 8. Title insurance: Title insurance is required by law and by your lender. It guarantees that the property is free of liens or conflicting rights of ownership. 9. Get home owner's insurance: You must provide proof of home owners insurance, one year, paid in advance. You'll do this on your own. Don’t wait. Don't let your insurance lapse. Your lender has the right to get high risk insurance on your behalf and the premiums are much more expensive. 10. Closing: You take on the responsibility of a mortgage and ownership of the property. A certified check is required for the amount of money you need to close. The title company coordinates and resolves all aspects of the closing. Unlock the door to your new home! Now you move in, paint, remodel or anything else... It's yours!! Curtis Biggs, a licensed mortgage advisor, has been helping people buy homes since 2002. Visit www.envision3m.com for more articles and resources. |
