- Pre-approval is the best place to start.
- Researching neighborhoods and talking to real estate agents are essential steps in the home-buying process.
- Get a sense of the neighborhood culture by speaking with locals or visiting at different times of the day.
- Make an offer and sign documents for inspections, appraisals, title insurance, and closing disclosure forms.
- Arm yourself with the knowledge to make buying a home manageable!
A total of 616,000 new single-family homes were sold in the U.S. in December 2022, representing a 2.3 percent increase since November. But it was 26.6 percent lower than the previous year’s sales rate! The average selling price was $528,400 in the same month, higher than the $491,000 in December 2021.
Buying a home is often the biggest purchase you’ll ever make. With so much already on your plate, it can be overwhelming to try and figure out every step in the home-buying process. This guide will walk you through what you need to know when buying your first home.
Getting Pre-Approved for a Mortgage
The best place to start is by getting pre-approved for a mortgage. A pre-approval letter lets sellers know they have access to a loan and are serious about buying their property. It also indicates what price range you should be looking at based on your current financial situation.
Work with Lenders
To get pre-approved, talk with different lenders and compare interest rates, points, fees, and other factors. Once you’ve chosen one lender, they’ll examine your credit history and debt-to-income ratio (DTI). This will determine how much money they can lend you for a down payment.
Veteran Advantage
If you are a veteran, you should work with a reputable company offering SBA loans for veterans. These loans do not require a down payment and have competitive interest rates. The closing costs of a VA loan are also limited. This can be an excellent option for veterans looking to purchase their first home with minimal upfront costs.
Finding the Right Neighborhood
Once you know what type of house and how much money you can spend, it’s time to start looking at neighborhoods. It would help if you considered factors like commute times, crime rates, school districts, and nearby activities/amenities. They should all play into your decision-making process when deciding where to buy your first home.
Research Before Offering
Make sure to research before putting any offers in; this will save time and energy if the neighborhood isn’t right for you or your family. Additionally, it’s essential to look at the existing homes in the neighborhood. Are they well-maintained? What do they look like? Do you see yourself living in one of these houses? A good rule of thumb is visiting a few houses for sale or renting and driving around the area. This will give you an idea of what kind of lifestyle you’ll live if you purchase a home in that neighborhood.
Work with Professionals
Once you’ve narrowed down your list of neighborhoods, it’s time to start talking to real estate agents and brokers. Make sure to ask lots of questions. Get their opinion on each neighborhood and the market; they should be able to provide valuable insights and data. Additionally, most real estate agents can provide you with comparable home sales in the area. The information will give you a better idea of what to expect when making an offer.
Neighborhood Culture
Finally, try and get a sense of the culture of each neighborhood. Talk to people who live there or visit during different times of day to get a better idea of the area. Are there parks, restaurants, and stores nearby? What is the atmosphere like in the neighborhood? Is it family-friendly or more suited for singles? Answering these questions can help you decide which neighborhood best fits your lifestyle.
Making an Offer & Closing On Your Home
When you’ve found the perfect home in the right neighborhood within your budget, it’s time to make an offer! If yours is accepted, congratulations- now the part where all the paperwork gets done.
Sign Documents
You’ll need to sign several documents, including contracts for inspections, appraisals, title insurance policies, and closing disclosure forms. These documents detail all the costs of buying a home, such as taxes and any prepaid interest or insurance premiums. Keep in mind that there are different types of mortgages available, so make sure that all these details are taken care of before signing on anything final.
Buying a home is an exciting yet intimidating experience – but it doesn’t have to be overwhelming if you arm yourself with knowledge beforehand! With this guide in hand, you can navigate through each step of buying your first home will seem more manageable than ever before. From getting pre-approved for a mortgage to making an offer & closing on your new house – now is the time to take charge and make it happen!
