Top 5 Homeownership Questions Answered
We loved these tips from Homeownership Sustainment Group in Las Vegas. No matter where you live, these are important things to remember when you’re ready to buy a home — like this one by Caliber Homes which was featured this fall on the Parade of Homes.
The decision to buy a home is a huge one.
But, who can blame you for taking this step? Unlike renting, where you are essentially paying someone else’s mortgage, the rewards of being a homeowner are innumerable.
Still, if you want to get the most bang for your buck, you must make sure that you stay on top of the home buying process. To make things easier for you, here are five of the top homeownership questions answered by experts from the Homeownership Sustainment Group:
What should I do before I purchase a home?
Before you do anything, make sure that your finances are in order. Check to see how much debt you owe on:
- Credit cards
- Student loans
- Car loans
At this point, it’s also helpful to start budgeting your income. This will help you see exactly how your money is being spent. It will also help you figure out how much money you can set aside to pay your mortgage every month.
What’s a mortgage pre-qualification and how do I get it?
A pre-qualification is a service offered by lenders that gives you an estimate of how much home you will be able to afford. It’s not a necessary part of the home buying process but getting pre-qualified is still a good idea. It shows the home seller that you can afford to purchase their property and can speed the whole process up significantly.
For the lender to determine how much money you may be able to borrow, he or she will need some information from you. The list includes:
- Annual income
- Amount of money you have available for a down payment
- Credit card balances
- Car loan balance
- Other loan balances
- Other factors that affect your income, like tax payments
Also, it’s important to note that, even a glowing pre-qualification doesn’t mean that you are approved for a loan. During this part of the process, the lender has not verified any of your information or run a credit report, a critical process. Your credit report will have information on it that may hinder your loan process or influence how much money you can borrow.
Do I really need a real estate agent?
Technically, you don’t need a professional real estate agent to help you buy your home. But, things will be a lot harder if you embark on this journey by yourself. Not only are these professionals trained to help you, they are also up to date on the closing process, real estate procedures, and current market conditions. (In the Twin Cities, check out these Realtor® members of the Builders Association of the Twin Cities). Furthermore, they’ve cultivated a host of helpful industry contacts, like appraisers, lenders, and other service professional, that can make the buying process much less of a headache. These advantages make it worth your while to get help from a professional.
How do I buy a house that I like?
Like this one by Accent Homes, featured on the Fall Parade of Homes!
The three main steps that you must follow once a house has caught your fancy are:
- Meet with your agent to finish the Offer to Purchase form
- Make a deposit, usually 1% of the sale price
- Negotiate with the seller to get a fair price on the property if it’s a resale home
During this time you may be tempted to give the seller a really low offer to get the negotiations going. But, if your offer is too low, you may have to deal with some unexpected consequences. For instance, you risk that another homebuyer will submit an offer that is better that yours. Or your low offer may rub the seller the wrong way and he or she may refuse to entertain any other offers from you.
What’s the closing process like?
The closing process begins once you and the seller have agreed on a price for the home. It generally lasts anywhere from one to two months.
During this period of time, the purchase contract is drawn up and signed, financial documents are finalized, appraisals and home inspections are completed, and other necessary paperwork is handled. On closing day, both you and the seller will meet to sign the final documents and he or she will give you your keys.
For most people, the decision to buy a home is one of the biggest they will make in their lives. But, it can also be one of the most rewarding. And, while the process can be tricky, it is our hope that the answers to the above questions can make things that much simpler for you. Happy House Hunting!