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How to Buy Your First Home
Once your bid on a house is accepted, you set in motion the process that will take you to finally holding a set of keys in your hand.
While you may be eager to move into your new place, it is in your best interest to do your due diligence to make sure you get a home that it is in good condition and at a good rate.
1. APPLY FOR A MORTGAGE
You have several options for obtaining a mortgage:
- Approach bank lenders or mortgage companies directly to get current rates.
- Ask people you know who have recently bought a home for their recommendations.
- Get a mortgage broker to do the work for you.
Because mortgage brokers are not tied to any one lender, they can save you time and hassle by doing the legwork for you. (Note: A broker is paid a fee set as a percentage of the loan amount, but this may be paid by the lender.) Banks may offer long term borrowers favorable rates. to go, make sure you consult with a few lenders to find the best deal.
2. GET A HOME INSPECTION
Schedule a home inspection as soon as possible so you can learn about any issues that may prevent you from buying
A standard home inspector’s report will cover the condition of the home from the foundation to roof, including heating, air-conditioning and plumbing, giving you the chance to reconsider or renegotiate if structural damage or needed repairs are discovered.
Ask local friends, family and your real estate agent for recommendations, then ask those inspectors for references from prior customers. You can also look up the inspector with your local Better Business Bureau.
Plan to attend the inspection. It will allow you to see that the inspector is doing a thorough job, such as getting up on the roof rather than looking at it from the ground and turning on the heat in the middle of the summer to make sure it works, But you can also use this time to ask questions about the condition of the home and pick up some helpful information about maintenance. The inspection will typically from $200 for a home less than 1,000 square feet to $400 or more for large homes, according to HomeAdvisor.com.
Radon and mold tests apply to all homes, while if you’re buying an older home, you may also want to check for asbestos and lead. These tests obviously add to the cost of the inspection.
3. GET AN APPRAISAL
Before you can finalize a mortgage to buy your home, the lender will want to assess the property value to make sure it is in line with the amount you are borrowing.
An appraisal considers everything from the home’s layout and square footage to what similar homes are selling for in the area to determine the home’s value. While the appraiser is chosen by the lender, a buyer can make sure his or her appraiser is licensed and familiar with the area where the property is.
Ask to see the appraiser’s credentials and find out how many appraisals he or she has performed in the area. If you are not satisfied, you can ask the lender to send someone else.
Appraisal fees, which are typically paid by the buyer, vary widely depending on the scope of the work and the size of the home. (On average, , according to HomeAdvisor.com, but some can cost more than $1,000.)
4. SHOP FOR HOMEOWNER’S AND TITLE INSURANCE
To protect your investment, you will want to secure a good homeowner’s policy as well as title insurance. Your lender will also typically require this as a condition of your loan. The , a trade association, offers a searchable database of .
You can compare rates for homeowner’s coverage at sites like Insure.com and NetQuote.com. You may also be able to cut your rate by buying your homeowner’s and auto insurance from the same company. For more information, Consumer Reports offers an .
5. DO A FINAL WALK-THROUGH
Right before you close on your new home, it’s important to do a last-minute walk-through to make sure everything is being left in the condition outlined the sales contract — like ceiling fixtures that the sellers or old built-ins they agreed to .
Go during daylight and be thorough — flipping light switches, turning on the water taps, running the appliances and flushing toilets — to make sure no new issues have cropped up. If the attic hasn’t been cleared out or a broken window is found, you can ask for a credit at the closing to pay for junk removal or repairs.
6. CLOSE THE DEAL
On closing day, all parties involved — the seller, the buyer and their various representatives — will sign the papers officially sealing the deal. (Parties may not always need to be present for the official closing.) Buyers must bring a check to cover , including title search fees, attorneys’ fees, transfer taxes and homeowner’s insurance.
When all the documents have been signed, and all funds have been properly distributed, the deed of ownership will be transferred to you.