Home Buyer’s Checklist
Whether you are a first time buyer or a seasoned home buyer, knowing what to expect during the home purchase process is key to having a great buying experience. Below is a checklist of items that will be helpful during your home buying journey.
1. Save for a down payment.
Having a good down payment is key in today’s market. In the past, lenders may have financed 100% of the purchase price. That isn’t usually the case anymore. Having a down payment of at least 10% is usually required. Having a down payment of 20% or more will enable you to omit having PMI (Private Mortgage Insurance) added to your monthly mortgage payment.
2. Determine how much you can afford.
You know your budget better than anyone else. Take into account what your current monthly housing costs are to get a starting point you feel comfortable with in terms of monthly expense. Use an online mortgage calculator to figure how much overall purchase price you can afford. Bear in mind, mortgage doesn’t take into account additional expenses like HOA fees.
3. Get preapproved for a mortgage.
Once you are comfortable with how much you can afford, talk to your bank or find a good mortgage company to get preapproved for a loan. Just because you think you can afford a property, doesn’t mean the bank thinks you can. If you aren’t preapproved for the amount you think you can afford, talk with your banker and see if there are things you can do to improve your credit score or alleviate whatever the circumstance is that the bank thinks you can afford less than you can.
4. Find a great realtor.
A great realtor can help you through the rest of the process of finding your perfect home. Once you have determined the amount you can afford and gotten preapproval from the bank, your realtor will have a great starting point to know which neighborhoods will offer the amenities you desire, the location you need, and the price you can afford.
5. Find your perfect home.
Part of the fun of finding a home is the search. Even with a great realtor, most people find enjoyment is scrolling through lists of houses and looking at what is out there. Who knows, you might find out you like something you never considered.
6. Make an offer.
So you found the perfect house. Now it is time to present an offer. Your real estate professional is invaluable in determining a fair price to offer. By finding comparable homes and taking into account any flaws or updates to the house, your real estate agent will help you arrive at a purchase price you are comfortable with. She can also help guide you through the negotiation process so that both you and the seller feel great about the transaction.
7. Apply for a mortgage.
Even though you preapproved for a mortgage, you still have to apply. During this process, your lender will ask for some in-depth documentation about your employment and financial history. Be sure to ask for guidance from both your lender and real estate agent when you have questions.
8. Finalizing the deal.
You have picked your house, made an acceptable offer, and completed your mortgage application. The work isn’t quite over. During this phase in the buying process, you will want to get an inspection from a licenses home inspector. Your real estate professional can help you find someone they trust and work with regularly. In addition to the inspection, your lender will likely require you to get an appraisal. This is the lending institution’s insurance that the house is actually worth what you want to pay for it. Both the inspection and appraisal also offer you an additional opportunity to negotiate for a lower price depending on what each yields.
9. Close the deal.
Once all the above is completed, all that is left is to close on the home. In South Carolina, all home purchase are overseen by a lawyer. If you do not know a real estate lawyer, ask your real estate agent for a referral. The agent typically has a person they trust and can recommend. Your agent, lender, and lawyer will help you to have everything you need at closing so everything goes smoothly.
10. Best for last!
All that is left now is to move in! Enjoy your new home.