By JODIE CHANDLER
Outgrown your rental? Tired of those dated appliances? And lets not even start on those neighbors partying upstairs at 2 a.m. on a Wednesday morning.
You’re tired of renting and ready to buy your first home. It’s scary and exciting. But where do you start?
A home purchase is your biggest investment of your life. Let’s talk about where you should start, and steps to do to help take the stress out of home buying and make it one of your greatest experiences.
We know what we want, but can we afford it? This is the first question that needs answered.
First step is to contact a mortgage lender. Whether you know a lender or need a contact for one, you can always contact me for a great trustworthy lender.
After choosing a lender, you will meet with them and go over your credit, salary, etc. (the lender will let you know everything you need to bring for a pre-approval) which will help determine how much you can afford.
Just remember, because you can afford it on paper, doesn’t mean you have to spend that much on a house. Please take into consideration your lifestyle, hobbies and what you like to do with your free time. You don’t want to be house poor.
Your lender will give you a pre-approval letter, which states you are pre-approved for a certain amount to spend on a home.
Some other things to consider are down payment and your spending. When you are in the market to purchase a home, think of it as a time to be frugal with your purchases – that new iPhone that just came out may cost you your pre-approval. Be careful on your spending. Charge card purchases or financing “something you need for the new home” can really impact your credit.
You have your pre-approval in hand, and a realtor (hopefully me) to show you some homes. When shopping for a home, the chances of getting everything on your list just might not happen, but remember the core items you need in a home. If you want a four-bedroom home, don’t settle for a two-bedroom because you love the kitchen!
My advice to you is to shop around, look at all the homes on your list, and remember to exercise patience – the house you want and need may not happen on your first trip out to look at homes. Take your time to find the perfect house, it will happen!
Also something to consider, if there are a few homes that interest you: Take some time in the evening, or leave a little early for work, drive by and get the feel of the areas you are looking in. Also, remember your work commute, this will be something you do every day.
You’ve found your dream home – offer accepted! I know that you are on cloud nine, it is all you can talk about, and your friends and family are happy for you (but at the same time, tired of hearing about it).
Don’t forget to have an inspection done. This is, in my opinion, one of the most important things in the home-buying process. Let your realtor suggest a top-notch inspector for you. I know cousin Bob is an inspector, but Aunt Mary has already told him how much you have to have this house. Sometimes having a biased opinion could save you thousands.
After you get the inspection report back, sit down and chat with your realtor and go over the report together. In most cases, a seller will not repair everything that needs repaired on an inspection report. A good realtor has been through this multiple times, and can help answer questions you may have, as well as the “needs” of repairs that you should have done to have your home as close to move-in ready as possible.
Now is the time to turn that pre-approval letter into a mortgage. Finalizing this step is key, and there are more to-do’s now. Your lender will be able to go over everything you need to close on your new home.
You will have to pay PMI – Private Mortgage Insurance – monthly with your mortgage if you do not have 20 percent down payment. Also, you will have closing costs, which are fees the lender charges to close your loan. In addition to these fees, most lenders require a full year’s home insurance policy to be purchased up front. So remember to include all these fees in addition to your down payment.
Time to call the movers. It is almost the moving date, but first you have a lot of paperwork to sign.
Your title company, which will be handled by your realtor, will be holding the closing. The closing is where you “sign your life away,” so to speak, but this is the process of signing the mortgage papers, title, and – most important – getting the keys to your new home !
You’ve done it. You’ve looked at properties, made an offer, obtained financing, and gone to closing. The home is yours. Is there any more to the home-buying process?
Whether you’re a first-time buyer or a repeat buyer, you’ll want to take several more steps. The best start is to contact a realtor. We can go over these steps more thoroughly and make sure that your home purchase goes as smoothly and painless as possible.
Jodie Chandler is a Realtor and broker in Indianapolis.