Ready to start building equity and live in your very own home?
First-time home buyers typically have a lot of questions and wonder, “What do I need to buy a house?”. So we’re here to help.
We’ve outlined the buying a house checklist you need to follow before buying a house.
Follow these steps for a smooth home buying process:
- Make the decision that you are ready
- Review your finances
- Figure out how much of a down payment you can afford
- Make a wish list
- Choose the right type of mortgage for you
- Select a mortgage lender
- Get the right real estate agent in your corner
- Start house shopping
- Make an offer
- Get a mortgage to buy the home
- Secure homeowners insurance
- Schedule a home inspection
- Schedule a home appraisal
- Make a negotiation plan with your real estate agent
- Close and celebrate
Whether you’re just thinking about buying a house or have completed the first necessary steps, Bortoni Properties is here to guide you through the home buying process. All with a “Touch of Aloha”! Contact us today to learn more.
1. Make The Decision That You Are Ready
Having your finances in order is one thing. But being emotionally prepared for home ownership is entirely different.
Here are some questions to ask yourself:
- What are my goals for the next 5 years?
- Are my partner and I on the same page regarding finances?
- Will I possibly need to relocate for work?
- Am I going to be starting a family in the next few years?
The answers to these questions can help you determine if now is the right time to buy a home. So seriously consider every aspect of your life and whether home ownership is right for you at this time.
2. Review Your Finances
A good place to start is your credit score. It’s important to realize that a higher credit score can drastically reduce your mortgage interest rate.
Secondly, you need to determine your budget. To do so, consider your income, debts, location, and the down payment you can afford. Use a home affordability calculator to see how monthly mortgage rates differ depending on your finances.
3. Figure Out How Much Of A Down Payment You Can Afford
Now, it’s time to look at your down payment options. While a 20% down payment would be good to keep monthly payments down, it’s not mandatory. In fact, many people put down less money upfront.
However, a lower down payment will likely mean higher monthly payments, and you’ll likely be required to pay for mortgage insurance.
4. Make A Wish List
If you’re seriously considering buying a new home, then you’ve probably done some window shopping. Now it’s time to put those home qualities that caught your attention into a list.
When you buy a home, you’re giving up the option to more easily switch apartments to another side of town. So you need to make sure you know where you want to live. Take a close look at the list below and add any other considerations you think of.
- Green spaces
- Retail stores and restaurants
- Property taxes
- Homeowner association (HOA) fees
- School district
While a move-in-ready house sounds fantastic, it’s not always the best for every budget. A few reasons to consider purchasing a fixer-upper include:
- Competitive market
- Ability to afford a larger house
- Relatively more expensive neighborhood
Type Of Home
Some people love the idea of a traditional home with a yard. Others may not want to deal with maintenance and would be better suited to live in a condo or townhouse with an HOA. What’s important is deciding what is right for you and your lifestyle.
5. Choose The Right Type Of Mortgage For You
Depending on your down payment, you will likely choose one of these types of mortgages:
Usually easier to qualify for but typically have mortgage insurance requirements.
Active and former service members and their eligible spouses are fans of this loan that does not require a down payment.
Pricier purchases using jumbo loans usually require excellent credit scores and substantial down payments.
Great for anyone buying a fixer-upper who wants the cost of home improvements included in the total home loan.
While these usually have low minimum down payments, they are not guaranteed by the federal government. Plus, the requirements for eligibility are more stringent.
6. Select A Mortgage Lender
Once you’ve decided on a loan that’s right for you, it’s time to choose a lender. Your real estate agent can likely give you good recommendations.
However, you want to make sure they can offer the loan you want. For instance, an FHA loan would need to come from an FHA-approved lender. Otherwise, you’ll go back to the drawing board to find a lender who suits your needs. A few things to consider:
- Compare their sample rates to current mortgage rates
- Compare the mortgage origination fees
- Find out what your closing costs will be
This process can be lengthy. But you’ll be a confident home shopper with a pre-approved loan. Plus, you’ll be ready to make an offer when you find the perfect home. Reach out to Bortoni Properties to access our list of trusted lenders.
7. Get The Right Real Estate Agent In Your Corner
Your home buying experience will greatly depend on the real estate agent you choose. Before signing into an agreement, make sure your real estate agent has the experience, market knowledge, and negotiating skills you need.
Bortoni Properties prides itself on putting our clients first. Our intimate knowledge of the Houston area and beyond allows us to navigate current listings to find you a house you’ll be proud to call home. Plus, we provide a “Touch of Aloha” and ensure you never leave money on the table.
Ready to experience home buying with a “Touch of Aloha”? Contact Bortoni Properties today to learn more about our client-first process.
8. Start House Shopping
Now it’s time for the fun part – house shopping! Together with your real estate agent, you’ll decide which listings are worth visiting. From there, you can narrow down the right home for you.
This part of the process is a lot smoother when you have a real estate agent who has your back and understands your goals.
9. Make An Offer
With your pre-approved loan in hand, your real estate agent will be ready to put an offer on your new home.
In a competitive market, an experienced real estate agent will let you know the best dollar amount to offer. Additionally, they will negotiate on your behalf to make sure you get the best deal possible.
10. Get A Mortgage To Buy The Home
Time to put that pre-approved loan to work. Keep in mind, you don’t have to go with the lender who pre-approved your loan.
Together with a loan officer, you’ll need to get through a lot of paperwork to finalize the deal. This may include W-2s, pay stubs, tax returns, bank statements, debt details, and more.
After the mortgage application is complete, the lender will decide whether to approve your loan in the underwriting process. This will include a deep dive into your finances, so be ready.
11. Secure Homeowners Insurance
Many lenders require buyers to acquire homeowners insurance before they actually own the home. The policy usually becomes effective upon closing.
12. Schedule A Home Inspection
A home inspection is always highly recommended. You need to know the exact condition of the home before you financially commit to being its owner. Many issues may arise, including roof or foundation problems. This may lead you to either back out of the purchase or negotiate a better deal with the seller.
13. Schedule A Home Appraisal
Often confused with the home inspection is the appraisal. It’s important to note they are two different concepts.
Your lender will likely require an appraisal to make sure the home is not worth less than the loan. This is their way of protecting themselves just in case you default on your loan, and they need to sell it to recoup their investment.
While this is a lender requirement, the cost of an appraisal will be on you – the buyer.
14. Make A Negotiation Plan With Your Real Estate Agent
You and your real estate agent will now take all the data from the inspection and appraisal to negotiate the best deal.
Rather than lowering the overall price, sometimes this means the seller will offer concessions like covering closing costs. However, in a sellers’ market, the seller can simply proceed to the next buyer. So keep your negotiations fair and to the point.
15. Close & Celebrate!
Your lender will send you a closing disclosure at least 3 days before the closing date. Go over these documents carefully to be familiar with everything once you get to the table.
You and your real estate agent will do a final walk through and ensure everything is as it should be. For example, did the seller leave the chandelier, refrigerator, washer, and dryer like they said they would? This is the time to check for every little detail.
Buy A Home With A Touch Of Aloha!
If you’re ready to take the step into home ownership, we are thrilled to guide you through the process. The Bortoni Properties team has the experience, market knowledge, expertise, and know-how to identify and buy the right home for you. Contact us today to get one step closer to your new home.