Did you know that June is National Homeownership Month?
The follow post describes what exactly it takes to be a homeowner and the steps that it takes to get there!
We would love to offer our expertise and knowledge of Real Estate to you to help you achieve your home ownership goals!
Contact us for any help needed!
The Guide for First-Time Homebuyers
What you need to know about going from full-time renter to homeowner and the process in between.
Owning a home is a major milestone many Americans expect to achieve in their lifetime. It’s not simply about having the ability to stay in one place for years – it’s also about taking advantage of the incentives to homeownership, including the financial security to make a major investment and see it grow over time.
Even for the millennial generation, which has been slower to become a major part of the homeowner pool than previous generations, buying a house remains a key goal in life.
While buying a house for the first time may be intimidating, no homeowner started the process feeling confident every step of the way. Here’s what first-time homebuyers need to know.
Are You Ready to Become a Homeowner?
Long before you start looking at houses, you have to be sure your finances are in order. The process of saving and making strategic financial decisions to ensure your credit history is more appealing to a lender can take more than a couple months if you haven’t already been working toward buying a house.
“I would say a year plus – and make sure you’re saving toward that goal over a period of time,” says Amin Dabit, director of advisory service for Personal Capital, an online financial advisory and wealth management company.
1. Credit history. Run a credit report on yourself – which is free to do once a year and doesn’t affect your credit by going to annualcreditreport.com and receiving a report from each the three major credit-reporting agencies – and focus on the areas you can improve. You may have credit card balances to pay off, or a few missed student loan payments from a couple years ago. You may also simply need more time to pass from a recent borrowing mistake. The more time that passes from the last blemish on your credit report, the less likely a lender is to consider it a red flag to give you a loan.
2. How much house can you afford? How good your finances look from a mortgage lender’s perspective isn’t the only thing to examine. You should also look at savings that can be used toward a down payment and determine how much you’d be able to afford on a monthly basis for your principal mortgage payment, interest, taxes and insurance, which Dabit recommends calculating as 28 percent of your gross income.
3. Savings for down-the-road expenses. Of course, you also have to take into account maintenance and other potential costs that may come up as a homeowner.
4. Who to consult. Once you’ve examined your financial history and expected future cash flow, it’s time to start talking to the professionals who will be able to help you throughout the process of buying a house.
A natural start is with a real estate agent. You can contact our home office at 304.645.2255, we are conveniently located on Washington St. E. in Lewisburg, WV. We enjoy offering our expertise to our clients. We can help you find a financial advisor if needed, a loan officer connected with a lender, real estate attorney, title insurance representative, home inspector and many more faces that will be part of your transaction.
Approach the process as assembling a team of people who will help you achieve homeownership.
What Mortgage Options Are Best for You?
When it comes to finding a mortgage, explore options with different lenders and the various products offered. Major banks, credit unions and nonbank lenders offer a variety of options to better fit your specific needs as a homeowner.
How Can You Prepare to Look at Houses?
At last, Greenbrier Real Estate Service can help you start looking at houses, condos, townhouses – whatever your homeownership preference may be.
Work with your agent to determine your list of must-haves in a home, whether it’s based on the number of bedrooms for kids and guests, the neighborhood that’s near your favorite restaurants and bars or a yard for your pets.
Take care to also get a realistic understanding of what your budget allows in your market.
What Should You Include in the Offer?
It may be the first house you tour with your agent – or it may be the 30th – but when you’re ready to make an offer on a house, it’s time to determine how much you’d like to offer, your needs and the seller’s as well. The latter might include a quick closing date, necessary repairs or covering closing costs.
Your preapproval for a mortgage will be an important part of formulating an enticing offer, so be ready with the preapproval letter from your lender when it comes time to determine your bid price and overall offer with your agent.
If you’re house hunting in a popular neighborhood, you’ll need to move quickly in making a decision and formulating an offer. If your agent expects there to be multiple offers on the property, be ready to put your best and final price on the table from the get-go.
Next Steps Toward Owning a Home
Once negotiations have finalized, the contract has been signed and you’ve provided a small amount of cash as a deposit or earnest money, you’ll have a few days to conduct your due diligence on the property. That includes the home inspection, which will tell you if there are any issues with the property that could affect the amount you’re willing to pay or if there’s anything that should be repaired before you move in.
You should also have funds ready for the closing costs, which typically account for between 2 percent to 5 percent of the sale price.
Your mortgage lender will also be working on the underwriting for the loan, including an appraisal of the property to ensure the purchase price matches its value, based on other sales of similar properties in the area. If the appraiser determines the house isn’t valued at the agreed-upon sale price, you may have to come up with cash to make up the difference, or try to negotiate the price down with the seller. You’ll likely have to provide updated proof of income, details on your existing debts and assets, information about your tax return and, of course, the address of the property you’re buying along with the price of the house and amount you’d like to borrow.
Just before closing, you’ll visit the home one more time, the final walk-through helps ensure there hasn’t been any additional damage to the house, and anything you expect to be gone has been removed before you get the keys.
The last step is the closing itself, which transfers the down payment to the seller, finalizes the mortgage and, with a few signatures including title clearance, transfers the deed into your name. You have the keys, and you’re officially a homeowner.
By Devon Thorsby US NEWS
If Greenbrier Real Estate Service can be of any help during your home buying process, please contact us.
We value our clients and enjoy giving our dedication and expertise of Real Estate to them!
Greenbrier Real Estate Service
1047 Washington St. E.
Lewisburg, WV 24901
Greg Allman, Broker