Starting the home buying process can be a scary process for buyers, especially for first time homeowners. From mortgage loan qualifying , to picking a realtor, insurance agent, etc, the process of purchasing a home can be complicated. Listed below are some steps Florida first time buyers should read to insure your home buying experience is smooth sailing.
Making the decision to become a homeowner:
Alright, you think you may be ready to stop renting and start being a homeowner? How exciting! Owning a home is a big part of the American dream. It’s also likely the biggest purchase you’ll ever make.
- How long do you plan to stay in the home? It’s best to think about buying a home if you plan to remain in the area for at least 3-5 years.
- How does your rent compare to your estimated mortgage payment? In some areas, renting may be much more affordable than owning a home. You can estimate the difference in costs using this mortgage calculator.
- Are you ready for the responsibility of owning a home? More than just making mortgage payments, being a homeowner also means paying insurance, making repairs, utilities, etc.
- Think about your reasons for deciding to buy a home. Are you considering buying because you are starting a family? Tired of renting? Need more room for your growing family?
Check out your options:
If you’ve passed the first step, you are mentally ready to buy a home. Next, let’s check out the current home buying climate to see if it really makes sense to become a homeowner now. Use the following checklist to evaluate your financial position:
- Have you saved for a down payment? A down payment may NOT be necessary for some first-time borrowers, but having one can help you save a lot of money on your mortgage. Ideally, you should have at least enough money saved up for home deposit, inspections, etc. The USDA home loan offer 100% no money financing in qualified locations. This program is perfect for first time home buyers that have limited savings.
- Evaluate home prices in your area. Are there any areas that are more affordable? Do experts think home prices will increase or decrease over the next few years?
- Research the home buying process online. Websites like www.hud.gov have all kinds of free information for people considering buying a home.
- Talk to people who have purchased homes in your area in the last few months. Ask them for their advice and opinions about buying a home. What challenges did they face? What tips do they offer?
Get that mortgage pre-approval:
Congratulations! You are ready to get serious about buying a home. Before you start going to those open houses, you need to work with a lender to get pre-approved for a mortgage. After all, you need to know if you are pre approved and for how much. Getting pre-approved for a mortgage will help you understand what you can afford to buy, will help your real estate agent narrow his or her search, and will help you negotiate with a seller. Use this checklist to obtain a pre-approval:
- Consult your mortgage professional to find the best home loan program that fits your need. 100% Rural Housing USDA, FHA home loan, VA, etc
- Once you have narrowed your search down to a few loan programs, apply for a pre-approved mortgage with your chosen lender.
- Your pre-approval is basically a promise from the lender that you can qualify to borrow up to a certain amount of money at a specific interest rate. This promise is subject to a property appraisal and other conditions.
- Remember, your loan application pre-approval is for the maximum amount you can potentially borrow. This is not the amount that you should spend or that you can comfortably afford each month. Try to use less than the maximum to buy a home.
- Act quickly, if possible. Most pre-approval offers last between 60-120 days before they expire.
Shop for a home:
This is the fun step! Find a real estate agent and start hunting for a house that fits your budget and needs. Your mortgage pre-approval will assist you with any negotiations you need to make. Use this checklist to help maximize your shopping experience:
- What features are you looking for in a home? Write a list of things that your ideal home will have. How many bedrooms? How many closets? Appliances? Take this list with you when you go look at homes.
- Take detailed notes about each home you see. It can be easy to forget the differences between properties when you are looking at several homes a day. Make a note of anything that needs to be fixed so you can evaluate the cost of these repairs. You may also want to bring a digital camera along with you.
- Check out the estimated value of the home online. Don’t take the seller’s word for it; look up the value online with this free home valuation service.
- Negotiate the price. In many housing markets, buyers have the power to negotiate a reduced price for a home. Work with your real-estate agent to come up with a good bargain.
Sign the purchase contract:
- When you find a home you love, work with your real estate agent to write a formal offer. This is usually a formal contract, so be sure that everything is accurate and correct before submitting your offer.
- Arrange for a home inspection. An inspection is a necessary step before you agree to buy the home. A $200-400 inspection could potentially reveal serious problems with the home that need to be fixed before the purchase or that could invalidate your offer.
- Evaluate your homeowners insurance and warranty options. Shop around for the best deal on these policies once you pick a home. You’ll need to secure your homeowner’s insurance before the final closing.
- Obtain final mortgage approval from your bank or lender. Since you were pre-approved it should be easy!
- Work with your loan agent to prepare the closing documents. This is the last major step towards becoming a homeowner and the step that requires you to sign a bunch of documents. Take some time to review these agreements closely and ask questions about things you don’t understand.
Florida and Georgia Home buyers can contact www.UsdaMortgageSource.com for more information about the 100% USDA mortgage. Home buyers located in more populated locations can learn about the 96.5% FHA home loan at www.FhaMortgageSource.com
Serving Bradford, Union and Clay County Florida – Brooker, Graham, Hampton, Lawtey, Starke, Lake Butler, Raiford, Worthington Springs, Bellair, Green Cove Springs, Keystone Heights, Middleburg, Orange Park, Penney Farms, 2015