How to Prepare to Buy a Home

by TM Maria Be a king in your own kingdom

Whether you have plans or have considered it, we have the necessary information so that one day you will be in the best condition to buy a home.

Five steps to prepare to buy a home

Buying a house is the dream of many families, but sometimes they do not know where to start the process. Here are 5 steps to follow to see how to prepare to buy a home.

Step 1: first of all, prepare your finances

Don't go to see houses yet. Make sure your finances are in order, so you really know how much you can afford. Use a mortgage calculator to calculate your budget based on your income, debt, savings, and other financial obligations. Check your credit score and compare your debt-to-income ratio. You should be able to comfortably make your full mortgage payment (including taxes and insurance) each month. And you most likely need money upfront for your down payment and closing costs. The good news is that most first-time buyers make a down payment of less than 20 percent.

Step 2: choose the right loan for you, and pre-qualify

Now that you have a budget, you are in a better position to meet with a lender and discuss loan options, current interest rates, and how much you can borrow. Once you find a loan that meets your needs, obtain a prequalification letter, which estimates your ability to apply for a loan based on your financial information. Please note that prequalification is not a loan commitment. You will need to submit additional information for review and approval. Still, having this letter handy when making an offer shows sellers that you are serious and gives you some bargaining edge.

Step 3: focus on your property and get your offer accepted

Now that you know what you qualify for, you can start the fun of home hunting with your real estate agent. Save time and emotional energy by narrowing your search to homes that fit your financial criteria. Preview the property online and ask your real estate agent to show you only the options that are right for you. When you find one that meets the criteria, your agent can help you make a smart and informed offer. If accepted, a purchase contract is drawn up that usually contains a good faith deposit (“earnest money”) that you are willing to give as a security deposit to show your commitment.

Step 4: stick with it through the mortgage process

Once the seller accepts your offer, it is time to apply for a mortgage. You generally have 45 to 60 days to fulfill your purchase contract, so you need to move fast. Within three days of submitting your application, your lender sends you a loan estimate, which includes an estimate of your interest rate, monthly payment, and closing costs. Please review this document carefully. To move forward you need to verify your income and assets. This requires extensive documentation, which is necessary for the lender to ensure that you will be a successful homeowner who can meet your loan payments over the long term.

5: Calmly move towards closure

Almost done. Once your mortgage is approved and at least three business days before closing, you will receive a closing disclosure document. It is a list of the charges you must pay, which are usually a total of 2 to 5 percent of the price of the house. Please read it carefully and tell your lender if you notice anything unusual. Know what to bring to closing, like your ID and any payments you have to make. If you have a joint signer, that person needs to be present. Most of the time it takes to carefully sign the forms. Once the loan closes; which can take a couple of days, the funds go to the seller, you receive the keys, and the house is yours!

Be clear that you should not be discriminated against

Whether you obtain a mortgage on your own or with someone else, lenders cannot deny you credit, charge you extra fees or interest rates, offer unfavorable terms, or discourage you from applying for a loan based on your, among other reasons. :

race
color
country of origin
sex
marital status
be a beneficiary of public assistance

Find out if there are assistance programs for first-time homebuyers

Many states and local organizations offer programs that help first-time buyers with down payments or closing costs. To find programs near you

A housing counselor or counselor can help you:

Deciding when is the right time for you to sell my house fast Midtown Tulsa, or how you can improve your credit to receive a better offer.

Take a good look at your home loan options, or what other options you would have if you improve your credit history.

Review your credit reports, income, and additional financial information and explain how the mortgage lender will evaluate your application.

The down payment decision

See how the amount of money you present for the down payment will affect the cost of your mortgage over the life of the loan.

Beware of Contracts for deeds ( Contracts for Deed or Land Contracts )

Sometimes the seller of a home offers a buyer to finance it directly through a “contract of the deed” and not through a bank or other lender. No matter what they are called in English, these methods of financing homes can be riskier than traditional mortgages because they do not have the protections that the latter provide. For example, even if you appear as the owner of the house in the deed contract, you really would not be until you make the last payment and comply with all the requirements and obligations of the contract.