Tips for Buyers

Home Buying Step by Step- It’s couldn’t be easier

Step 1 - Is Homeownership Right for You?

Buying a home is one of the biggest emotional and financial decisions you’ll ever make, so prepare yourself to make a knowledgeable decision.

Although buying a home almost always seems like a great idea, it is important to understand what homeownership involves. Of course, being a homeowner is something to be proud of but it also means having to invest money, time and energy and take on added responsibilities. So, before you decide to buy a home, make sure you’re ready.

Here are some things to consider:

  • Financial Security. If housing prices rise, your home can provide you with some financial security due to capital appreciation. 
  • Stability. Having a place of your own. 
  • Financial Stress. Coming up with the down payment, meeting regular mortgage payments and other ongoing costs will tie up a lot of your cash, and can put considerable stress on your finances. 
  • Maintenance. Keeping your home in good shape requires time and money. 
  • Responsibility. You alone are responsible for payments, repairs and maintenance. 
  • Flexibility. You can decorate or renovate your home to meet your own family’s personal tastes and needs. 

Step 2 - Are You Financially Ready?

In this step you need to evaluate your current financial situation and determine how much house you can afford and the maximum price that you should be considering.  A mortgage professional can help you determine your qualification. You should candidly discuss your financial situation with him or her and not withhold any information. Most likely, your mortgage consultant will want to know your yearly household income as well as your assets and liabilities. If you can discuss your finances candidly and determine what you can reasonably qualify for a loan, then no one’s time will be wasted. Otherwise, your agent may end up being a tour guide, showing you beautiful houses that you will never be able to get a mortgage for rather than helping you find an appropriate property to make an offer on. 

Step 3 - How Much Will It Really Cost?

Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.

Upfront Costs
You will need to plan ahead to cover the many up-front costs of buying a home. Timing is important to help make sure things go smoothly. 

Mortgage Loan Insurance Premium. If yours is a high-ratio mortgage (less than 20% down payment), your lender may need mortgage loan insurance. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing. 

Appraisal Fee. Your mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services. 

Download our complete buyer information package now (PDF format).

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