The Steps to Home Ownership
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To buy a home, you must first determine if you are credit worthy and income eligible. You must contact a licensed Loan Officer to determine this. This is called pre-qualification. If you are eligible for a home purchase loan the Loan Officer will provide you with a pre-approval letter.
You will need to have some money saved up to pay for a down payment and your share of closing costs. Although, there are 100% financing programs, down payment assistance programs, seller's assistance agreement, that would greatly reduce out of pocket costs. Start shopping for homes. This can be done using the realty section of your local newspaper, online, or by driving around the areas you would like to buy in. Contact a buyer's realtor for assistance with the home shopping. They can provide you with a current list of available properties for sale. The buyer realtor gets paid from the sellers realtor fees, not by you. Your realtor will work with you to come up with a reasonable offer on the house. You can often offer and secure a purchase price below the listing price. Once you are ready to make an offer on a home the realtor will require an earnest money deposit from you. This is to show the sellers that you are serious about buying their home. Earnest money deposits usually start at about $1,000. Once you have a purchase agreement signed by the sellers and yourself, although it may not be required by the lender, get a home inspection to assure that there are no hidden problems with the house. You will then need to get a homeowners insurance policy for the house you are buying. It is usually a good idea to get that from the insurance company that you insure your car(s) with. This will make you eligible for a discount. During this process, your lender will require additional documents from you as they work to get your loan cleared to close by the underwriter. Once your loan is cleared to close there is normally a walk through done to assure that the sellers have removed or left agreed upon items. If all is as agreed a closing date is set and you and your realtor will meet with the sellers and the title agency to complete the transfer of ownership and get the keys to your new home. |