In the market for a new home? While you probably wish you could jump right into decorating and housewarming parties, you've got a lot of work to do first.
Home buying is a pretty intensive process, but the reward of a new home is well worth the effort. Below, we've outlined some of the steps you need to take before sending out those housewarming invitations.
know your credit score
Your credit reflects how you manage your finances. Mortgage lenders use credit scores to determine your eligibility for a loan and to establish the interest rates and terms. You should review your credit report before applying for a mortgage loan to ensure there are no errors that could hinder your chances of getting a good loan.
find the right mortgage lender
Your mortgage loan is crucial to your home buying success, so it pays to shop around for just the right loan and lender. Once you find a lender you're comfortable with, work on getting pre-approved for a loan.
Although the terms are often used interchangeably, there's a difference between pre-qualifying and being pre-approved for a loan. Pre-qualified means someone has looked at your basic financial information and given you an idea of what you can afford. Pre-approved, on the other hand, means a lender has looked closely at both your credit report and your income and determined that you're eligible for a loan.
decide on your “must-haves”
Before you meet with a real estate agent, make a list of the features you desire in a home. For some, it's a good school district, for others, it's a swimming pool. Whatever it is, it'll help your real estate agent narrow down a list of homes.
find an agent
Generally you'll work with only one real estate agent, so you want to make sure he or she has your best interest in mind. When searching for an agent, be sure to ask around for referrals from friends, coworkers, and neighbors. You can also search online for reviews or attend open houses where you can speak to an agent without pressure.
It's important to note that not all real estate agents are realtors. Realtors belong to the National Association of Realtors and pledge to follow its Code of Ethics, which establishes standards of business conduct.
start searching for a home
Your agent will show you a variety of listings and may take you to several houses. However, you should also feel free to research listings and open houses on your own. The newspaper, the internet, and real estate magazines are all good resources.
When you're looking at houses, you'll want to investigate more than just the number of bathrooms and the amount of closet space. It's important to also figure out how much work the house will require, what the resale potential of the home is, and if the neighborhood has any property or building restrictions.
make an offer
You've found your dream home. But how much should you offer? The housing market varies throughout the country, as do real estate laws and practices. Your real estate agent can help you figure out how to make an appropriate offer. You should also find out what information the seller is required to disclose. For example, lead-based paint disclosures are required on all houses built before 1978. The seller should also make known any information that could affect your decision to buy the home or the price you're willing to pay for it.
have the home inspected
Before closing, it's essential that you have the home inspected. Your agent can you help you determine which inspections are necessary. Depending on the age of the house and the area it's in, additional tests may be needed. It's also important to stay on top of any last-minute issues that may arise.
get homeowners insurance
The house is nearly yours. Before you close, most mortgage lenders require that you purchase homeowners insurance. Luckily, buying homeowners insurance is easy through Esurance. You can get a free homeowners or condo insurance quote and buy your policy directly online.
close the deal
Before the house closes, be sure to do a final walk-through to make sure it's in the condition you agreed to. Test faucets, fixtures, and heating/cooling systems. Inspect floors, walls, and windows. If everything meets your approval, you can sign the remaining papers and start planning that housewarming party!
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