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Buying
A New Home?
10 Steps To Making Your Dream Home Purchase A Reality |
In a perfect world, owing a home gives you both
a great place to live as well as providing an
asset that gains value over the time that you
own it.
The stress of trying to make the right decision when it comes to a
home purchase can get overwhelming; it's important to follow certain
steps that will help make your home ownership dreams come true.
1. Get Pre-Approved For A Home Mortgage Loan
BEFORE You Shop For Your Home.
Talk to a loan specialist at your bank or credit union; find
a person who understands your concerns as a first-time home buyer.
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Find a person and institution
that will not only give you a complete assessment of
how much home you can afford, but what hidden costs
are part of the transaction as well. Note the difference
between pre-approval and pre-qualification. Pre-approval
means you’ve completed the loan application process
and have the funds ready to spend.
2. Do Your Homework Regarding Neighborhoods And Price
BEFORE You Talk With A Real Estate Agent.
Research the areas you think
you’d like to
live in and the price of homes there; you can do
this while you’re waiting for home
loan approval. When you’re armed with this information, you
can better direct your search by eliminating homes/areas that are
out of your price range. You made need to make concessions based
on what you discover; to afford a desired neighborhood you may have
to look at a smaller home with fewer amenities.
3. Select A Real Estate
Agent Familiar With The Areas You're Interested In.
It is important to work with
someone who can explain local sales, trends and particulars
about your desired area. If you have a young family,
information about local schools is especially important.
Also, it pays to work with an agent who’s commitment to the area you’ve
chosen is obvious.
It is helpful to find an agent who specializes in first-time
buyers; an agent who can help explain procedures and is
sensitive to your concerns. Remember: it is the seller
who pays the agents’ commission, so
don’t select someone based on how cheap they are!
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4.
See A Lot Of Homes When You First Set Out To Look.
As you become familiar with prices in the area you’ve
chosen, make a list of things you NEED in a home versus
things you WANT in a home. Once you know what you can
and can’t live without, don’t waste time
looking at properties that don’t fit your description.
5. Don't Cross
A House Off the List Because of "Changeable
Ugliness".
Don’t
like the green shag carpeting in the den,
or the pink paisley bathroom wallpaper?
Remember, these types of decoration and
light structural oddities can be changed.
Consider if the home you are looking at
has a good floor plan and a good location;
those attributes are harder to change.
6. Research The
Homeowners Association.
If you are considering a condominium or
home in a structured community, read a
copy of the HOA rules. Several newer home
tracts have CC&R’s, or Conditions,
Covenants and Restrictions that forbid
certain things like owning motorcycles,
or place limits on what type of color you
can paint your home. Ask your agent if
they are familiar with the reputation of
the HOA; ask current owners if they are
happy with the HOA.
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7. Remember To Budget For "Other
Costs".
Property Taxes, Home Maintenance,
Repair, Insurance and Home Owner’s
Association dues all add up. Property taxes are usually somewhere
around 1.25% of a home’s assessed value, meaning the tax burden
on a $400,000 home will be about $5,000 the year after you buy the
home. Future repairs should also be budgeted for (roof repair, new
air conditioner, etc.).
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8.
Try To Keep Within Your Budget.
Although many
first-time buyers can qualify for more than they need,
a larger mortgage may be more than you can comfortable
afford.
Work with your lender on a loan for an amount you can REALISTICALLY afford,
one that takes into account the monthly mortgage, fees, taxes, and insurance
costs.
Keep in mind the fact that if you are stretched too thin financially,
you will not be able to afford landscaping, window coverings, unexpected
repairs, etc.
9. Get Your Prospective Home Inspected By
A Professional.
Work with your agent to have an “inspection contingency” written
in to your deal, allowing you at least a three-day grace period when
you make a purchase offer. During this grace period, you can have major
components of the house looked at by YOUR inspector, review the report,
and adjust your offer if necessary. |
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You can even cancel your purchase
contract without penalty. Private inspections can turn
up problems or concerns that could affect your purchase
decision; be sure to budget for this type of service.
10. Brace
Yourself For "The Closing Process".
Obtaining homeowner’s insurance, having your
home loan funded, doing the final walk-trough on
your home, signing piles of closing documents and
handing over a large cashier’s check for
the final loan costs: these are just SOME of the
elements of completing your home purchase.
Working with professionals you trust can help smooth out this process,
but it is recommended that you read up on the home-buyer/closing process
ahead of time, to eliminate as many “surprises” as possible.
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