Buying a home requires thoughtful planning and decision making.
Whether you’re becoming a homeowner for the first time or you’re a repeat buyer, buying a home is a financial and emotional decision that requires the experience and support of a team of reliable professionals including a REALTOR, a lender, a lawyer and a range of other individuals.
Buying a house is a long term investment and can work out cheaper than renting.
Buying your own home can be expensive but could save you money over the years. Renting offers less freedom to live by your own rules but more flexibility if you need to move.
Most lenders have specific formulas they use to determine whether a borrower’s capacity is acceptable. Mortgage companies, for example, use the debt-to-income ratio, which states a borrower’s monthly debt as a percentage of his monthly income. A high debt to income ratio is perceived by lenders as high risk, and it may lead to a decline or altered terms of repayment that cost more over the duration of the loan or credit line.
There are many things to consider when buying a house—price, location, condition, size, schools, and more.
A pre-approval letter from a mortgage lender indicates that the lender has reviewed a buyer’s finances and will approve them for a home loan of a certain amount, pending final review of their finances and the property being purchased.
Obtaining a pre-approval from a lender involves submitting financial details like social security number, paystubs, bank statements and tax returns. Lenders will verify income, debt and payment history before issuing a pre-approval.
A pre-approval letter is a critical piece of bidding on a home. This document is provided to a home seller to prove that you are qualified and able to close on the real estate purchase you are trying to make.
A pre-approval is different from a pre-qualification because financial information is researched and verified.
A home warranty is not the same thing as homeowner’s insurance, which covers major perils such as fires, hail, property crimes, and certain types of water damage that could affect the entire structure and/or the homeowner’s personal possessions. A home warranty is a contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a home’s major components, such as the furnace, air conditioning, plumbing, and electrical systems. A home warranty may also cover major appliances, such as washers and dryers, refrigerators, and swimming pools.
Like all warranties, a home warranty is supposed to protect against expensive, unforeseen repair bills and provide peace of mind. For a homeowner who doesn’t have an emergency fund or wants to protect one, a home warranty can act as a buffer. Home warranties also make sense for people who aren’t handy or don’t want to worry about tracking down a contractor when they have a problem. Warranties can also make sense for people with expensive taste in appliances.
Closing day is an exciting event for homebuyers. If everything goes smoothly, it usually ends with a toast and a new set of keys.
The closing is when the buyer and seller sign the papers officially sealing the deal, and ownership of the property is transferred. It’s also your last opportunity as the buyer to make any final changes to the transaction.
Although you may feel ready to get out on your own, or get back out on your own, make sure your finances are in order before you take the leap. Take a look at some rental listings in the areas in which you are interested in living and get an idea of how much you’ll have to pay to live there.
If the seller counter-offers, you can then accept, counter, or decline as well. You can negotiate back and forth as many times as you’d like until you reach an agreement or someone decides to walk away.
Once your offer is accepted (or you accept a counter-offer), you sign the purchase agreement. You’re now under contract. This period of time is called the contingency period, and any inspections, appraisals, or anything else built into your purchase agreement will take place.
For many buyers and sellers, the real estate agent has become a trusted advisor, much like a portfolio manager. If someone is living in a robust real estate market, like a cosmopolitan city or affluent suburb, it makes sense to not only hire a smart and experienced agent to shepherd the often confusing process of buying or selling property, but also to follow his or her advice.
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