Moving into a new home is an exciting time, and you’re probably daydreaming about decor and paint schemes and new furniture. But before you get into the fun stuff, there are some basics you should cover first.
Change the locks
Even if you’re promised that new locks have been installed in your home, you can never be too careful. It’s worth the money to have the peace of mind that comes with knowing that no one else has the keys to your home. Changing the locks can be a DIY project, or you can call in a locksmith for a little extra money.
Steam clean the carpets
It’s good to get a fresh start with your floors before you start decorating. The previous owners may have had pets, young children, or just some plain old clumsiness. Take the time to steam clean the carpets so that your floors are free of stains and allergens. It’s pretty easy and affordable to rent a steam cleaner—your local grocery store may have them available.
Call an exterminator
Prior to move-in, you probably haven’t spent enough time in the house to get a view of any pests that may be lurking. Call an exterminator to take care of any mice, insects, and other critters that may be hiding in your home.
Clean out the kitchen
If the previous occupants wanted to skip on some of their cleaning duties when they moved out, the kitchen is where they probably cut corners. Wipe down the inside of cabinets, clean out the refrigerator, clean the oven, and clean in the nooks and crannies underneath the appliances
After making the decision to purchase a home, you will need to get pre approved for a loan, unless you are purchasing a home in cash. It is best to do this before starting to look at houses. This will allow you to know what price range you can begin searching. It will also save you from falling in love with something you cannot afford. When you submit an offer on a home, a pre approval is included with the offer, this will show seller’s you are qualified to purchase their home.
First step is to fill out a loan application. If you do not know of a lender, contact a real estate agent, they can always point you in the right direction, as they work closely with lender’s on every transaction.
On this application, it will ask for basic information, along with your social security number, past 2 years of work history and financial information. All of this information is used to obtain a credit report. Typically, a credit report will be ordered from all 3 credit bureaus. In addition, payment history and any major credit issues will be checked.
Items you may be required to provide:
**Recent paystubs and W-2s for the most recent 2 years. If you receive commissions and/or overtime, lenders may require a 2 year history/explanation of this.
**Tax returns, if you are self-employed or own rental property, you may be required to provide tax returns for the most recent 2 years.
**Bank statements: Lenders normally ask for 1 – 2 months of bank statements. This provides documentation of where a down payment and closing costs will be coming from. A “gift” letter may be required, if any of the down payment or closing costs is being given by a family member or company.
**Additional information: Teachers may be required to provide a copy of their teaching contract, explaining their pay schedule. Large deposits and/or name changes may need to be explained.
You will receive a Loan Estimate within 3 business days of submitting your loan application. This will detail the costs and terms for the loan in which applied.
After receiving your pre approval, it is always a good idea to shop around for a loan with the best terms.
Now the fun begins! Time to start looking for a home.
With rent increases on the rise, many people are deciding it’s time to purchase their first home. Whether it be a single family home, townhouse or condo, purchasing a first home is exciting, but can also seem overwhelming. Many people are concerned with their lack of funds, when it comes to a down payment. There are so many programs available for first time home buyers, that require little to no money down. To relieve some of the first time home buying stress, I’ve outlined the important steps that you will take on your road to becoming a first time home buyer!
With the current real estate market being so HOT, the first step in purchasing a home is to get a pre-approved. When you find a home that you would like to purchase and write an offer, the seller will usually only consider reviewing the offer if the buyer has been pre qualified. When you have become pre qualified the lender will provide you with a letter stating the amount of home you can purchase. This decision will be based on income, debts, credit ,etc. Having a pre approval letter shows the seller you are qualified to purchase their home.
Next, find a real estate agent to work with through the home buying process. A real estate agent has the experience and expertise needed to help you every step of the way. After selecting an agent, you will want to set up a home buyer’s consultation. At this meeting, you will not only get to know each other, but also discuss expectations of both parties. In addition, you will go over your needs and wants in a new home. After deciding you want to work with the agent, a buyer’s agency contract will be signed by both parties. Basically, this is a contract stating you will be working exclusively with this agent and he/she will be representing you.
And now the FUN begins! You will start looking at homes. When you find a home that you like and want to make an offer, your agent will pull comps in the area to make sure it is at fair market value. Your agent will write the offer, but you will decide what you want to offer. Your agent is there for guidance, but in the end you decide how much you want to offer, along with any contingencies. There are things that are negotiable, when submitting an offer: the price, any personal property you may want to ask for, how much earnest deposit you will put down and the closing date. With the HOT market we are in right now, remember that you may be in a multiple offer situation. Always try to put yourself in the seller’s shoes. In other words, if you ask for everything and go in with a really low price, you will probably lose the home. Once you have decided on your offer, your agent will write it up, have you sign it and submit it to the seller’s agent. The seller’s agent will then submit it to the seller. The seller will either accept the offer, reject the offer or counter the offer. If the offer is countered, it can go back and forth multiple times.
Upon accepting an offer with all parties signatures, the buyer has a certain number of days to have an inspection completed. Inspections are in the best interest of the buyer. It is paid for by the buyer, but can save on a lot of costly problems. After the inspection has been completed, the buyer’s agent will look over the inspection with the buyer. At this point, you can ask the seller to correct/fix/replace certain items, reduce the price of the home, ask for some money towards closing costs (this will allow you to pay for certain items needing fixed or replaced) or the buyer can accept the property “as is”. There are certain time periods to have everything completed and signed. Your agent will know the time allowed.
After the inspection is completed, items have been replaced/fixed, a couple of days, before the closing, you will have a final walk thru with your agent. At this time you will make sure everything is in working condition or in the condition stated on the seller’s disclosure. If items are not in the condition as stated, your agent will contact the seller’s agent. This may result in a delayed closing.
Once the walk thru is complete, it is time to close on your home! At the closing you will sign all required documentation, present down payment and closing costs. The earnest deposit that you put down when your offer was accepted, will be credited towards your down payment. Down payments and closing costs typically have to be in the form of a cashiers check. Your lender will advise you on this. The majority of real estate agents will attend the closing with you.
Moving day! You did it, you just became a first time home buyer and now get to move into your home.
Always check with a few different lenders, to get the best rates for your mortgage, along with the best terms.
There are so many first time home buyers programs requiring little money down. It is important to work with a reputable lender that is knowledgeable with the different programs available. If you don’t know of a lender, contact a real estate agent, they can usually send you in the right direction.
So, you have decided to buy a house, where do you start? One of the first things to consider is how much money do you need for a down payment? Typically, the minimum is 3.5%, although there are some first time home buyer programs that only require 3%.
Now, let’s talk about down payments. An FHA loan requires 3.5% down and you will be paying private mortgage insurance, monthly, for the life of the loan. For a conventional loan, minimum is usually 5% down, but if you put 20% down, you will not be making the monthly private mortgage insurance payments. Again, there are some 3% loan down payments. 20% down is definitely a large chunk of change, that many of us do not have, so let’s explore some other down payment options.
Ask yourself,” how can I get creative with coming up with a down payment?” Besides the obvious of spending less and saving more, there are a few other down payment options to consider.
A family member may “gift” you funds for a down payment. This will require full documentation from the family member to the lender. The documentation will show the donor has the funds to provide this gift.
Another option is state down payment assistance programs. Your lender will be able to give you information about these programs, if they are available. Often these programs are based on a specific location, price and income limits may apply.
Retirement accounts can be a means for a down payment. Make sure you check with a financial advisor regarding your account. The advisor will be able to “break down” the terms of your account. For example, will you pay taxes or a penalty for your withdrawal? There are rules for the different retirement accounts.
Always remember, the lower the down payment is, the loan will usually have a higher interest rate. It may take a few of the various down payment options to obtain your down payment. Allow some extra funds for homeownership expenses, you never know what you’ll need it for. Your trusted lender can explain the different programs and options available for you. If you don’t have a trusted lender, your real estate agent can recommend one.