Buying Your First Home

  • December 10, 2014

Buying your first home is one of biggest financial moves most people will ever make. What steps can you take to make the process go as smoothly as possible?
 
First things first: make sure you’re ready. Buying your first home is a tremendous responsibility, and it’s important to take it seriously. Are you ready to take on a major financial obligation that will impact your financial future for years to come?
 
Keep in mind that home ownership is a lot more costly than renting and has many “hidden” expenses, such as the maintenance. Plus, you may have more utility bills than you do now. And, your monthly mortgage payment will include more than just the principal and interest on your loan. You’ll also have to pay homeowner’s insurance and property taxes.
 
Plus, you’ll need cash for the down payment (as much as 20% of the home’s purchase price) and closing costs. Above all, you’ll want to be sure you can comfortably afford your new mortgage payment while maintaining an “emergency fund” set aside for unexpected expenses.
 
Get preapproved for a mortgage, before you start house hunting. That way, you’re shopping with the confidence of a cash buyer. Home sellers will know you’re a serious buyer, because you have cash in hand and are ready to negotiate.
 
Talk through your mortgage options with your lender. If you’ve never shopped for a mortgage before, you may be surprised by just how many different options you have. Do you like the security of having the same mortgage payment month after month? Would you be comfortable with an adjustable rate mortgage, which may help lower your payments and qualify you for more home? Do you plan on living in your new home for many years or just a few?
 
These are just some of the answers you should ask yourself. Your mortgage lender can guide you through the process and help you choose the best mortgage for you and your financial situation.
 
Choose a real estate professional and start house hunting! He or she will ask about your home buying goals and price range, and then show you the candidates that are the best “fit” for you. Your agent will also help you establish an offer price for the home you want and negotiate the sale.
 
Get a home inspection.  Once you’re serious about a home, you’ll want to have it inspected to ensure there won’t be any hidden surprises after you move in (such as termites, mold and so on). Note that a home inspection is different from an appraisal, which your lender will order to verify the home’s value warrants the mortgage amount.
 
Apply for your mortgage. Your lender should walk you through every step and make the process as simple as possible for you. The mortgage process can be complex, so it’s important to ask about anything you don’t understand.
 
Close on you new home! Once the papers are signed at the closing table, you’ll be ready to move in. Be sure you update your address at your bank and other important institutions and arrange to have your mail forwarded.
 
Congratulations! You’re joining the millions of homeowners across America who made their own corner of the American Dream come true with their mortgage lender at their side every step of the way.

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