Steps To Buying A Home
How much you can afford.
Mortgage lender will look at a couple different numbers to find out your spending limit. The first figure is your take-home pay. Banks like to follow the 28/36 rule: Your monthly mortgage payments should total no more than 28 percent of your net paycheck, and your total debts, including car payments and student loans, shouldn't inch over 36 percent.
Get preapproved for a loan.
For a small fee, a lender will contact your employer, bank, and others to verify your income, assets, debts, and credit history. You’ll then get a letter stating that your mortgage is approved for a certain amount (which will help you determine your price limit!) up until a certain date. This document is more for the home seller’s benefit to prove that you’re a serious buyer. There's no obligation on your part to actually get a mortgage.
Start searching for new digs!
That's what we're for! We will put you on the Multiple Listing Service (MLS) and you will get daily listing updates of the homes available in the areas you are interested in living. When you see something you like, we will make an appointment to see it.
Make an offer.
After finding the home of your dreams it's time to make an offer. We will research currently sold properties to get an idea of what similar homes in the area have sold for. Based on the research, what you can afford and what you feel comfortable with we will submit an initial offer. If it’s far below the asking price, be prepared for a counter offer. You may go back and forth a couple of times with counter offers.
Settle on a price.
The seller will respond in one of three ways: an acceptance, a counter-bid (giving you a number somewhere between your offer and the asking price), or declining by sticking to their original asking price. If you can agree on a number, you’ll sign a contract and be asked to put down a “binder” or “earnest money", this is usually between $100 -$500. This money is refundable if you elect to withdraw your offer, should the owner not accept your original terms.
Get an inspection.
While not required it is highly recommended that you have a certified inspector inspect the home you are preparing to buy. This will cost you several hundred dollars depending on the inspector.
WHY A HOME INSPECTOR: A home inspector examines what kind of shape a house is in. He or she will look at its structure (whether there’s any damage to the foundation, roof, or walls) and also check out the plumbing, electric systems, heating, and air-conditioning. Home inspectors don't give an appraisal based on what they find; they don’t determine your home’s value. Instead, they’ll let you know what kind of repairs are needed before you buy a home, or they can tell you how to avoid future problems in your existing house.
Close the deal.
Once the inspection is done, you’ll need to contact your lender and move forward on acquiring a loan, this process generally takes 3 to 4 weeks. When you have the final approval from the bank they will send you a notification letter and request your signature...it is at that time you officially have bank approval.
You will then need to hire a lawyer. Your lawyer will: review the purchase and sales contract, check the deed to the property to ensure there are no problems (i.e. unknown easements, encroachments etc.) , set up a closing date, register the property at the registry of deeds once all documents are signed and moneys paid.