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Home Buying ProcessIf you are looking in the real estate market, you want to be sure you are clear on the home buying process. The steps can seem complicated and confusing, but the home buying process is very simple when you look at it systematically. If you are unclear on any particular area, you should have a chat with a relevant real estate professional who can explain the home buying process simply for you. Step One of the Home Buying Process Work out exactly what you are looking for and what your personal requirements are. How much room do you need, how many bedrooms and bathrooms will you want and what style home do you like? All these things will come into play when working out how much you will need to apply for with the bank loan. To make the home buying process simple, it is a good idea to write these items down. Make a list of what you want in a home in order of priority. Put things that are a must in one column and preferences in another. Then write down what you definitely do not want, as this will come in handy too. Be realistic and realize, if you are a first-time home buyer, you probably won't get your dream home for some time to come and everyone has to start somewhere. Step Two of the Home Buying Process Get your credit in order. Correct any items on your credit that are incorrect, and also withhold from obtaining any new lines of credit. Don't sign up for bank or store cards, buy a new car or take out a personal loan. You want to look as good as you possibly can when the bank reviews your mortgage application, so the less debt you have the better. When the bank sees you have credit cards, they consider the full amount even if you haven't used it. Step Three of the Home Buying Process Get pre-approval for a mortgage which will arm you with the price range of home you can qualify for. It is in your best interest to educate yourself on the various loans available which you may qualify for. The higher of a deposit you have saved, and the larger your income, the more options you will have available with the lender of your choice. Even with a modest deposit set aside you may still qualify for home ownership through government loan programs. Naturally, the more deposit you have saved, the better loan terms you can qualify for. Don't just apply for a loan with your current bank without comparing what other financial institutes have to offer, because you want to find the best interest rate available for you. There are a few reasons why pre-approval is important before starting the home buying process. It helps streamline your search so you don't waste time on homes out of your price range and it frees you to make an offer when you find one you like. If your offer is accepted, the whole process of organizing contract and settlement dates can happen much faster and sometimes you will be in your home fifteen days later. Pre-approval isn't just about how much you can spend but is based on how much you can pay back while still living comfortably. Step Four of the Home Buying Process Obtain the services of a real estate professional to help you with your home search. Over four-fifths of homes sold are done through networking agents. Real estate agents or brokers have access to homes for sale on the market before they are listed for sale and can alert you to homes that fit your profile ahead of any mls listings. A good real estate agent can also provide you with important statistics, zoning information, property restrictions and other issues you should consider prior to making an offer. If you decide to conduct a home search on your own, you should hire an attorney who specializes in real estate to guide you through the complicated home buying paperwork. Step Five of the Home Buying Process Make your offer on the home you want. It is a standard rule of thumb to never offer full price up front and always make sure the contract has an option for you to back out in case any problems arise and is also contingent on getting a home inspection and reviewing the results. Always make your offer in writing and include an earnest money payment, which can be from as little as $1 to as much as you wish. Be aware, though, that if there are other competing buyers, offering a very small earnest money check may result in the seller refusing your offer. When your offer has been accepted, you should arrange appraisals and inspections prior to signing final contracts. This way you are aware of any problems before it's too late. Step Six of the Home Buying Process Negotiate the finer points of the sale to both parties satisfaction. It is extremely important you have thoroughly worked out all your expenses before you sign your settlement contracts. There will be some costs that are covered by the lender and some you need to cover. Other things may even be included in the amount you are borrowing, but you have to be clear on every single expense. You don't want to arrive on settlement day to get a hefty bill you weren't expecting, so work it out and even go through it with the agent and lender so they can confirm it's all correct. Step Seven of the Home Buying Process Formally complete the loan process. This will entail the lender arranging for appraisal of the home. Here is where you will find out if the home has a fair market price as the lender keeps the amount they will loan to a ceiling on the price per square foot per home. Your lender may accept the appraisal you may have hired before you committed to buy, but chances are they will want their own appraisers to perform the appraisal. If there is a discrepancy in the lender's appraisal and the asking price of the home, you can return to the seller for renegotiations to a lower price, a clause you should have worked into the formal offer. Step Eight of the Home Buying Process Complete the closing of the home sale. The closing takes place with both the seller and buyer present and their legal representatives. You will have many forms to sign, and have to read and listen to the terms of the sale as part of the closing process, which can take an hour or more. This is where an experienced real estate attorney or agent can help to handle any last minute problems that may unexpectedly arise at the settlement. The home buying process is almost at an end and once you have signed the final paper, which you, of course, read ten times first, you should be handed the keys. You can move in and finally have the reward of relaxing in your very own new home. It really is a feeling to be experienced and if you have followed the simple home buying process, you will be satisfied and happy living in your purchase for many years to come. |
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