In this report, we will explore the 7 steps of owning a house.
When many people think of owning a home, they think of the process of buying, selling, repairing, remodeling, and maintaining.
But there are many other aspects of owning a home that is also important, and ones that are often overlooked.
When you buy a house, you not only get to enjoy the benefits that come with it (like the feeling that comes with having your own home), but you also get to deal with some issues that come with it (like repairing the damages caused by the previous owners, paying property taxes, and dealing with the contractors that come by to fix them).
While owning a house is a serious task, there are some things you need to know to make it easier (like finding the best mortgage loan company, using contractors that are cheaper but still reliable, and trying to avoid property tax increase).
We have broken this process down into seven easy steps to remember when owning a house
1. Obtaining A Loan
A mortgage is a loan that funds the purchase or construction of your new home. The borrower can use their house as collateral, which eliminates any risk for lenders but typically requires at least some initial down payment money from them to get approved!
If you’ve been thinking about buying a home, this is a perfect time! Before we get into what makes for an awesome first mortgage application.
Borrowers need to know their credit score and be able to make at least 3% to 5% down payment plus closing costs.
Remember to keep in mind the closing costs are not the same as your down-payment.
Also, remember that there are different terms you can choose from also. Most of the time most people will want a fixed rate. Make sure you ask your mortgage lender whether or not your loan is a fixed or a variable rate.
So what is a fixed-rate mortgage?
A fixed-rate is a set price regardless of how much the loan cost.
This type of pricing is usually used in the following cases:
– The borrower doesn’t want to see a fluctuation in price.
– The borrower wants a guaranteed interest rate and doesn’t want the rate to fluctuate with the market.
– They want to make sure that their budget doesn’t exceed what they have planned for.
So what is a variable rate mortgage?
A variable-rate mortgage is a mortgage that has an interest rate that varies over the term of the loan.
A variable rate mortgage can be either an adjustable or a floating-rate mortgage, which is determined by whether the interest rate changes periodically.
The other thing to look for is how long you want the mortgage terms to be. Typically the average mortgage is 30 years. But there are times when someone might want the mortgage to be 20 to 15 years.
If you go with the shorter mortgage terms the home will be paid off sooner but you will have a higher monthly payment.
Once you have talked to a lender and received your approval letter you are ready for the next step.
2. Working with a Real Estate Agent
To buy or sell a house, it is wise to consult with experts. A knowledgeable real estate agent can help you navigate the process of buying or selling property.
With more than 85% of all residential property transactions involving real estate agents, these experts are indispensable for transactions. While most buyers and sellers probably think they can manage the process on their own, people who work in the industry know better.
There are many reasons why you should work with a real estate agent to buy or sell your home:
– The expertise that an agent has is hard to come by without experience in the industry
– An expert’s experience will help you avoid making mistakes that could cost you money, and time.
– There are plenty of fees associated with selling and buying property but working with a Real Estate Agent can help you to understand what the fees are and they can help you through the transaction.
Remember when you work with a Real Estate Agent there are fees associated with hiring them to represent you.
Typically a Real Estate Agent will have you sign a Buyers Representation Agreement to be exclusive with them.
3. Find Your Dream Home
As you start your homebuying journey, make sure that you know the timeline and what steps are involved in this process. Buying a house is one of the biggest investments in your life and it should not be taken lightly.
Home buying is tough and it can be quite a lengthy process. It’s about more than just finding the perfect home, it’s about jumping through all the hoops of the home buying timeline.
The first step of the process is deciding on your budget and figuring out what you’re looking for in terms of size, location, and features.
Typically you want to pick out three to four possible locations in which you are interested in looking.
What this does is narrow down your search criteria to those specific areas.
Once you have an idea of what areas you are interested in you next want to narrow down what is going to be your maximum price point.
It is not uncommon to be approved for $550,000 and decide to only look at homes that are priced around $500,000 to $495,000.
What you are doing is you are narrowing down what you are searching for.
The other thing you want to do is figure out the most important things that matter to you about the home.
Do you want a big kitchen? Do you want a nice size backyard? Do you want a home that has a pool? The more you can narrow this down the better you will become at searching for the home you want.
When you are using tools like Zillow.com, Realtor.com, or even this website to search for a home you can use the criteria search to narrow down what it is you are looking for.
When this is done you are eliminating other homes that do not fix what you want and you are becoming more stealthy at finding properties that match what you want.
4. Make Your Offer
There are many important things to consider when making an offer on a house. Here are the most common considerations:
Consideration #1: Make sure you make a reasonable offer.
When you are making an offer to the seller remember not to insult the seller by making a lowball offer.
Keep in mind what type of market you are in at the time you are making offers. If the market is more of a seller’s market then it’s going to be harder to deal with getting a lower price point.
If you are in a buyers market then it is not uncommon for a seller to accept a lower than asking price offer.
Your goal is to create more of a win; win situation for you and the seller.
Consideration # 2 Know the condition of the property.
The more you understand the condition of the home the better you can make a consideration on what you will offer for the home.
It is a good idea to read the Seller’s Disclosure before you make your offer. If the property has a lot of work then you can base your offer on what you found in the Seller’s Disclosure and the Inspection Report during your option period.
Consideration # 3 Have Your Highest And Best In Mind
Just in case you have a multiple offer situation. You want to consider what your highest and best offer will be.
It is a good rule of thumb to know this number before going in and making an offer on the property.
So always have your highest and best offer in mind.
5. Do Your Inspection
A Home inspection typically tackles place after your offer has been accepted by the homeowner and you are in your Option Period.
A home inspection is a process of assessing the condition of a property before buying it.
Home inspections typically include structural and safety inspections, as well as water and heating safety checks.
This is to ensure that there are no defects present in the property that could be hazardous for the living.
There are many benefits to doing a home inspection before buying a property, such as:
having a better understanding of the defects of a property.
When you do a home inspection you make sure you know the detailed information of everything that could be wrong with the property.
It will also give you an idea of what repairs need to be done to the home so that you want to go in blindly not knowing if the home has major defects.
6. Do Your Final Walk-Through
A final walk-through is an important step when buying a home.
You should go through the house with your agent or the seller to make sure that there are no surprises.
A final walk-through is a chance for you to confirm that everything looks the way it did before you made an offer on the house.
This can be especially important if you’re buying a foreclosure, short sale, or bank-owned property.
You want to make sure that the home looked excellent the way it did when you made your offer.
You also want to do this when you are dealing with a newly home-built home.
When you do a final walkthrough you will normally do this with your Real Estate Agent. Your Real Estate Agent will have a form for you to fill out.
This is to ensure that you are ok with the way the property looks and you are ready to move forward with closing on the property.
7. Closing On Your New Home
You’ve been looking for a new house for months now. Finally, you found the perfect one. But before you can close on it, you have to go over all the numbers and make sure everything is in order.
You want to make sure that you know what your final loan payment will be. You want to make sure you know what your interest rate is.
Also, you should have a good idea of how much will be in your escrow account.
You should also get quotes on your home insurance and know exactly what the yearly amount will cost you.
If your lender requires an escrow account, they will typically handle setting up the account and depositing funds into this account on a month-to-month basis.
However, if your lender doesn’t require an escrow account-you may be responsible for paying for your taxes and insurance.
You want to check with your lender to find out which one you have.
You will also need to contact your lender to see if you are required to pay PMI (Private Mortgage Insurance)
You are now ready to go to the title company where you will sign the necessary loan paperwork and the title company will issue you a warranty deed and title policy.
Congratulations you are now a new home owner!
Conclusion
Owning a house is a great investment for those who are looking to build their wealth. However, it can be a difficult process to navigate through, but following these steps will guarantee success.
I hope this article has helped you better understand the process of buying a house and how to get started.
The next step is up to you, but don’t be afraid!
If any questions came up during your reading experience or after finishing this post, please feel free to contact me and I will do my best to answer them for you.
Remember, if anything in here didn’t make sense or was unclear, just ask away.
Good luck on your journey and let me know if this article helped you out. Please feel free to share it with your family and friends.