A home of one’s own is like a dream come true. Buying a home could be a good investment if the market is on the rise. It gives you many benefits other than being an owner. There is reduction in income tax payments through tax deductions on mortgage payments and property taxes and along with that you get a steady source of cash flow with the growing equity in your home, not to mention the freedom and independence of your own home.
Buying a home should be planned carefully and this involves a step by step procedure.
Personal review: The first step is to determine your financial position and fix a budget accordingly. Your current income, monthly expenses, credit report, down payment that you are ready to put along with the closing costs will help you to do this calculation.
Finding a lender: This is one of the most important factors that should be considered. The lender is the best guide in determining things like how much mortgage you may get and give a pre-approval for the mortgage. Make sure to work with an honest and professional lender to avoid complications during the entire loan term. You may have to shop for a while for lenders, comparing costs and interest rates, and negotiating for a better offer.
Get a mortgage pre-approval: Only a mortgage pre-approval will give you an estimate of how much you may afford. A seller will always want to see a buyer who is financially ready for the purchase and in such cases the pre-approval gives you an added advantage.
Start searching for a home: It is always wise to take the help of an experienced real estate agent while looking for a home. The price of the house is essential for you to consider. Apart from this, the location of the house, the kind of house (new/ resale/ build new), its probable resale value are some of the other factors to be considered. Discuss with your real estate agent and make an offer to the seller. Remember to get a home inspection which tells you about the condition of the property.
Get the loan underway: As soon as the seller agrees to your offer, write a contract and start following through the loan. Contact your lender and ask him to start processing the loan as early as possible. If you have been pre-approved, most of the work is done and the loan will be processed quickly.
Get prepared for Closing: This is the final step in buying a home. On the closing date, the ownership of the house will be officially transferred to you. There would be several other up-front costs involved in the process which you have to pay at closing.
Find Below what our Financial Adviser, Mrs Martin wants to say regarding buying a home:
You should never hesitate to take necessary help from the real estate agent or your lender. If required you may also approach an attorney and consult him. You will feel comfortable about the transaction if you understand every step involved in the process as you are making a long term commitment and spending a major amount of money.