Is this the first time you’re going on a home buying journey? Are you a first-time home buyer?
Buying a home can be an exciting time. However, it can also be overwhelming; and understandably so, given that it’s probably the biggest purchase you’ll ever make.
Buying a house requires a lot of time and effort, but these 5 steps can help make your home buying journey more manageable and help you make the best decisions possible.
Step 1: Start your search as early as possible.
As soon as you can, start going through websites, magazines, and newspapers that have real estate listings. Take note of homes that you’re interested in and see how long they stay on the market. Also, take note of any changes in asking prices. Doing so can give you a sense of the housing trends in areas you’re interested in.
Step 2: Determine how much you can actually afford.
If you plan to make a 20% down payment and have a moderate amount of other debt, lenders often recommend that people look for homes that cost no more than 3 – 5 times their annual household income. But, this doesn’t apply to everyone. It is up to you to determine how much you can actually afford. Make sure to review your finances thoroughly.
Step 3: Get pre-qualified and pre-approved for a mortgage.
You need to know how much you can actually spend. The best way to determine that is to get pre-qualified for a mortgage. To get pre-qualified, you just have to provide some financial information to your mortgage banker. They will review this information and tell you how much you can borrow. In turn, this will tell you the price range of the homes you can consider. Later, you can get pre-approved for credit, which involves providing your financial documents so your lender can verify your credit and financial status.
Step 4. Find the right realtor.
Look for reputable and licensed real estate agents who can help you in your home buying journey. A real estate agent will be of great value as they can provide you with professional advice and guidance on the whole process. Also, check with your state’s real estate licensing board to make sure that the realtor you’re interested in doesn’t have any complaints against them.
Step 5: Review the list you’ve made and make an offer.
Go over the list you’ve made in Step 1. Which among those homes are still on the market and are within your price range? Start touring those homes until you find the right one for you. Take as much time as you need – you don’t have to rush the process. Then, work with your real estate agent to negotiate an offer based on the value of comparable homes within the same neighborhood.
The Bottom Line
The home buying process involves a lot of steps aside from the 5 mentioned here. But, the sooner you get started on these 5 steps, the closer you’ll be to buying your dream home!
Will Bell Mortgage Broker is a mortgage and finance broker based in Melbourne specializing in residential home loans. Will is all about the average Australian understanding just enough of the broader economy to take action on your own personal economy. He is the host of the My Personal Economy Podcast which you can check out here.
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