Becoming a homeowner for the first time is exciting. However, for many potential buyers, the process can also be confusing. Below is an overview of the steps you need to complete in order to buy your first home.
Work Out The Finances
The first step in buying a home is deciding on a price range. This price range will be determined by your income, as well as your own comfort level with home prices and monthly payments. Consider all of these factors to determine the maximum amount you are willing to spend on your new home.
In most cases, you will be required to pay the downpayment and closing costs upfront, even if you are financing the rest of the home’s purchase price. In general, most lenders will expect a downpayment equal to 20 percent of the home’s purchase price. Otherwise, you may be required to pay mortgage insurance. Before buying a home, set enough money aside to cover these expenses.
For most homeowners, the next step in the home buying process involves looking into different mortgage options. Unless you have enough money to purchase your home for cash, you will need a mortgage. Be sure to compare quotes from different lenders before making a choice to be sure you are getting the best deal. Once you have chosen a lender and a specific type of mortgage, ask for a preapproval letter that you can attach to any offers you make so that you will be a more reliable and attractive buyer.
Hire An Agent
When searching for the perfect first home, hiring a real estate agent to represent you throughout the process is highly recommended. Your real estate agent will act as a buyer’s agent, which means they will have your best interests at heart. When you don’t have a buyer’s agent, you will be dealing only with the seller’s real estate agent instead. Because this individual has been hired to represent the seller, they will always put the seller’s needs above yours.
Find The Right Home
Once you have a qualified agent to represent you and a preapproval letter from your lender, it is time to start looking for your new home! Your real estate agent will help you comb through listings and choose the properties you want to see. Next, you will walk through each home until you find the one that is right for you. After you have chosen a home, your real estate agent will help you prepare and submit an offer to the seller.
The process of buying your first home may seem overwhelming at first. However, by following these steps, you can simplify the process and become a homeowner with ease.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.