10 Tips For Home Buyers

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Every first-time home buyer should tackle the very first step of finding out their finances. Buying a new home (especially for the first time) needs a mortgage, where a lender gives you the money and you are paying it back over time. However, you'll need some sort of down payment to

Every first-time home buyer should tackle the very first step of finding out their finances. Buying a new home (especially for the first time) needs a mortgage, where a lender gives you the money and you are paying it back over time. However, you'll need some sort of down payment to get a mortgage.

What do you need, then?

Ideally, a down payment on a mortgage would be 20 percent of the home 's price to reduce extra fees, but don't worry if you don't have too much of an up payment. A mortgage down payment on other forms of mortgages (e.g. VA loans or a USDA loan) may be as small as 10 percent, 5 percent, or even 0 percent.

Stage 2: Examine your credit score
Have you ever failed to pay off those credit cards? Unfortunately, your credit score will be affected.

A first-time homebuyer would need a good credit score, in addition to getting a down payment. The three-digit number is a numerical description of your credit history, a detailed document indicating how well you have paid off previous debts such as credit cards and student loans from college.

A lender can review your score and report to estimate the chances that you will still be making your monthly payment.

The lender, in effect, will use this data to determine whether or not to lend you money, and how much and at what interest rate. When a lender has any late payments on your credit card or other flaws on your credit report, this can reduce your chances of securing a loan with a high-interest rate, or maybe even jeopardize your chances of receiving any loan at all.

And knowing your credit score is important, and taking steps with those overextended credit cards and high-interest loans to get your credit score up to snuff. Here's more about how to test your credit score and what amount to buy a first home is best.

Phase 3: Get your mortgage pre-approved
You will receive pre-approval from a lender for a home loan prior to going home buying. It is where you meet with a loan officer, preferably a number at various mortgage companies.

Every mortgage lender (LendingTree is only one example) can scrutinize your financial backgrounds — such as your debt-to-income ratio and assets — and use this data to decide whether to lend you money and what size you can reasonably manage monthly payments. It will help you search for homes within your price range. And that's good because a purchase price beyond your financial ability will force you to sweat your mortgage payment and put you at risk of defaulting on your credit.

When a borrower, clearly bear in mind that pre-approval of mortgages is distinct from pre-qualification mortgages. Pre-qualify, and you are undertaking a much easier phase that will give you a ballpark figure on what you can afford to borrow, but without the lender making any guarantee. Having pre-approved is more of a hassle because you're going to have to have lots of paperwork, but the trouble is worth it because it means you 're creditworthy and can actually buy a home.

One move homebuyers can take to begin knowing what they can expect as a monthly mortgage payment before they ever visit a lender is to plug their details into an online home affordability calculator. The maximum amount you can handle as a monthly payment will be estimated here.

Step 4: Search for a real estate agent

Would you like to have a trusty home buy guide by your side? Most first-timers will want a great real estate agent — specifically a buyer's agent who will help them find the right houses advertise on for sale or rent by owner, negotiate a major real estate deal and explain all the shades of home buying along the way.

Better part? The services of the agent are free to first-time homebuyers (because the seller charges the fee for the sales).

Phase 5: Head in for a home store!

Here's the fun part! You can peruse thousands of real estate listings on sites like realtor.com as a home buyer, and ask your agent to set up appointments to see your highlights in person.

Since the sheer number of homes can get overwhelming, it's best to distinguish the must-haves from the features you 'd want, but don't necessarily need. Will you like a new home, or would you prefer a fixer-upper? Create a list of your origins and desires, and whittle down your choices.

Phase 6: Make a Bid

Find a dream home? It is then time for the seller to make a bid.

Here's more about how a seller can't refuse to make an offer on a home.

Phase 7: Get a Home Test

A home inspection is where you employ a home inspector to examine the house from top to bottom to decide whether there are any problems with it that could cause you to think twice before moving on. Think termites, base defects, mould, asbestos, etc. Of course, a lot can go wrong but be assured that most problems can be fixed.

Phase 8: Get a Home Evaluation

And if your home loan has been pre-approved the lender may want to perform a home appraisal. That is where the lender checks the house out to ensure that it's a safe investment. It's like a home inspection except it's for your lender.

Here's more about the method of home valuation, and what to expect as a buyer.

Phase 9: Closing Lead

Closing, also known as settlement or escrow in various parts of the world, brings together a number of parties that are part of the real estate deal, including the buyer, seller, mortgage agent, and others.

Closing is the day that you officially get the keys to your new home — and pay off to all the different parties involved. This will include your loan down payment, plus the closing costs, the extra fees you pay to process your loan.

The cost of closing can be substantial, running between 2 percent and 7 percent of the home price everywhere.

The closing costs for home buyers are more in here.

Step 10: Turn in!

Done with the shutdown? Did you have the loan? Congratulations, you have graduated officially from home buyer to homeowner! See, after all, the protracted process of buying a first home wasn't that frightening, right? Now is the time to sit back and take advantage of the many advantages of being a homeowner.

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