Step 2: Find A Mortgage Loan ProfessionalBefore you go house hunting, call a few mortgage loan companies and ask to be put on a consumer type contest. Tell them you are thinking of buying a house and you want to know what rates you qualify for and what you will have to spend on closing costs. Have a fun contest but be serious as only about 2 percent of American households own their homes we buy your house.
Determine your mortgage loan amount. The monthly payments should include principal, interest, taxes, and insurance. The down payment you put down will affect the rate you will be offered.
Find an appraiser you are happy with. In order to provide you with a loan estimate, most companies will require an appraisal of the house. Make sure you use an appraiser that is trustworthy. Don't use the first one you find, or your inspector may over appraise your new home and the rate you get will be higher then you were expecting.
Step 3: Get Pre-qualifiedContact a loan office and get a pre-qualification letter. If the lender already has your information, ask them to refer you to a mortgage broker they will know. Don't bother them if they don't have a mortgage broker, just go right to the broker you are offered. He or she will help you in your loan purchase save you money, time, and heartache later on.
Make sure you don't give more than you can afford. When you go to look at houses, estimate how much you can pay each month, how much you want to spend, and how much you think you can put down. Only look at houses that you can afford or that you can at least afford. You don't want to have a lot of money left on the table after the mortgage is paid.
Step 4: Choose A NeighborhoodSelect a neighborhood that you like and enjoy. If you are already familiar with it, great, otherwise start by checking out some of the neighborhoods each potential home is located. From an aesthetic standpoint what are the main points of your potential home? How is the neighborhood set up for you (compare homes with yours in terms of size and amenities)? What floor plan are you offered? Buy a house within your budget. Think about your home and how you will use it within your current living environment in order to get an idea of how it would look in a finished neighborhood.
Step 5: Decide On FinancingTalk to your broker about the best mortgage loan programs. Be very honest that you can afford up to a certain amount per month. Many people are approved for loans that are not realistic. Marketing agents and real estate people live off commissions and sadly many are too optimistic when it comes to hitting the mark. Accept that your daily savings is not enough as there are many things that can happen. If something should suddenly happen, are you going to be able to pay off the mortgage? How many months would you have to pay off the mortgage before you could afford to reinstate the loan? Remember to be realistic.
Step 6: Buy Your HomeOnce you think you have found your dream home, make an offer. Your agent can help you with this. Your offer should be low enough to meet the seller's "bottom line." Make sure you know how long you plan to own the house so you do not buy something just because you are paying too much. You may also want to pay an option deposit. Sometimes a seller will accept a lower offer if you pay the option fee. Decide on the repayment terms and mid term repayment plan before you commit to any home.
Step 7: Close the DealOnce you have chosen your financing and dealt with agents and attorneys, all it is left is to sign the final documents and move into your new home. Remember that your new mortgage will be with the lender you choose, and not the seller. Make sure they have enough to cover the closing costs. You will need to bring back a loan officer from your local bank and provide him or her with copies of all the documents you gave them.