A Beginner's Guide to Buy a House
by Andrew L
There is no doubt that the market for houses has been on fire recently.
More and more people are taking advantage of low interest rates
and easy mortgage loan terms to go from being renters to being home
owners. With so many people entering the market, it is inevitable
that questions will arise.
There are many things to consider when buying your first home. Some
of the most important steps to buy a house are:
Learning the home buying process
Start by learning as much as you can about how the home buying and
mortgage application process works. Read as much as you can about
buying a home. Check out the many books in your local library that
offer hints to first time home buyers. Read financial web sites
on the internet for tips for first time home buyers. You may even
want to sign up for a class aimed at first time homeowners. Many
towns and cities offer these kinds of classes, and they can be a
great source of information for the buyer looking for his or her
Find out the pre-qualified price range
It is important to find out how much you can borrow before you start
looking for a home. Talk with several mortgage lenders in your area
and get pre-qualified for a particular price range. The mortgage
lender will be able to help you determine how much you can borrow
based on your annual income. In general, mortgage lenders recommend
that all home related expenses, including the mortgage payment,
insurance premiums and real estate taxes, do not exceed 28% of your
Get Pre-approved for mortgage loan
The next step is to get pre-approved for mortgage financing. This
is similar to getting pre-qualified for a price range, but it is
a more formal process. You will need to supply proof of your income
for the pre-approval process to move forward. Most lenders will
want to see income tax returns from the past two years as proof
of the income you are claiming.
After you have been pre-approved for your mortgage loan, it is time
to actually start house hunting with a realtor (find out why you
need to find a realtor before buying a house?). Your mortgage lender
will give you a letter stating that you have been pre-approved for
a mortgage and the amount you are authorized to borrow. You will
need to present this letter to the real estate agent when you get
started. It is important to get pre-approved for a mortgage loan
before beginning your home search. The real estate agent and real
estate company will be much more willing to work with you if they
know you can afford the home you are looking at. In addition, sellers
will take your offer much more seriously if it is accompanied by
a pre-approval letter from your mortgage lender.
Make an offer
Once you have found a home that meets your needs, it is time to
make an offer on the property. You will already know the most you
can spend from the pre-approval process, and you probably will have
your own ideas on what the property is actually worth. In addition,
your real estate agent can guide you through the negotiation process
and offer procedures. A copy of your pre-approval letter will be
presented as part of the written offer. This will ensure the seller
that your offer is legitimate.
If the seller accepts your first offer, congratulations. Your negotiations
are over and you're ready to start preparing for your move. More
likely, however, is that the seller will come back with a counter-offer.
This negotiation process can go on for a short or long amount of
time, depending on factors like the motivation of the seller, the
local real estate market, and a host of other factors. The real
estate agent will be a good guide through the negotiation process.
After all, he or she will have been through this process many times
Provide copy of Purchase and Sale Agreement to mortgage broker
After the negotiation process has been completed, you will need
to present your mortgage broker with a copy of the Purchase and
Sale Agreement for the home.
Work to close the mortgage loan
After presenting the Purchase and Sales Agreement, you will need
to work with the mortgage broker to ensure you meet all the conditions
required for the closing of the mortgage loan.
Home inspection prior closing
Prior to closing, you will want to make sure to have a thorough
home inspection performed by a qualified and certified home inspector.
A home inspection will protect you from flaws in the construction
and condition of the home that are not obvious to the naked eye.
Home inspections can uncover things like foundation cracks, termite
infestation and other home quality issues.
Hand over down payment
After the home inspection has been performed and the report has
come back clean (or all the items uncovered have been repaired),
it is time for the buyer to actually hand over the money for the
down payment and sign the loan documents.
Collect the house key
After the closing of the loan, the fun part of home buying begins.
Your real estate agent will hand over the keys to your new home
and you can actually move in and enjoy your beautiful new home.
Welcome to moving day!
About the Author
Andrew is the web owner of "Buy a house and sell house fast
Guide", a website that provides informational guide on home
buying, selling house, home mortgage loan, foreclosure home, real
estate investment, and more.