If one of your New Years resolutions is to become a Homeowner in 2013, It's time to start outlining the steps you need to take in order to be able to purchase your new home.
The steps needed aren't as overwhelming as you might think and aren't all that different from other resolutions you may have set for yourself. A clear goal with a defined path and a determination to stay focused will end with the keys to your new home in the palm of your hand.
So where do you start? There are 5 major components to the home buying process in Indiana
- Finding and Touring Homes
- Writing an Offer
- Proceeding to closing
The first step towards finding a new home is making sure you can afford it by getting pre-qualified for a mortgage. A pre-qualification is an estimate from a Lender of what you can afford based upon your income, monthly debts, credit history and assets. This is not a guarantee of funds but will give you an idea of what price range you will qualify for and make your offer more attractive to sellers, giving you a better chance of getting your dream home. However, there is more to buying a home than making a down-payment and getting a loan. You will need to budget for all the upfront costs associated with buying your next home including closing costs, escrow monies, appraisals and inspections. Based upon your mortgage, your lender should be able to give you an idea of upfront costs and what your monthly payment will be. Ask questions of your lender and have a thorough review done for your particular situation to avoid any surprises along the way.
Finding and Touring Homes
While it's not required for you to use a Realtor in buying your home, purchasing a Home is one of the biggest financial decisions you’ll make in your lifetime. It makes sense to have a Realtor on your side to walk you through all the steps of the process and be there to represent your best interests so you can focus on finding your dream Home. The more your Realtor knows about your wants and needs in a home, the quicker they can screen listings and set up showings. This eliminates touring homes that don’t meet your criteria, saving you valuable time and headaches....so be sure to consult with your Realtor about your budget and needs prior to scheduling showings. Your Realtor should be able to share homes on the market with you in addition to your online search. Ask your Realtor which websites they recommend using when searching online.
Writing an Offer
Once you’ve found the perfect Home, your Realtor will write an offer to present on your behalf. After you've negotiated the price and terms you are willing to accept and have received an acceptance, there are several steps that need to be taken in order to get to closing smoothly. This is where your Realtor will guide you through the process in order to avoid any bumps along the way.
Proceeding to Closing
The following is a general checklist of things that need to be done...be sure to check with your Realtor about your specific items.
Submit Earnest Money A good faith deposit not to be confused with a down payment. When you execute a purchase contract, the contract will specify how much money you are initially putting up to secure the contract. An earnest money deposit says to the seller that you are serious about buying their house.
Securing a Loan Commitment Typically a buyer will have up to 5 days to turn in any documentation requested by their lender in order begin processing your loan application to secure financing.
Home Inspection Ask your Realtor for references if you don’t have a preferred inspector. This may include general, pest, radon and any other inspections you would like to have done. There is a deadline to have these done by, so make sure to schedule as soon as possible
Appraisal Your Lender will require an appraisal of the property to insure it is valued for at least the purchase amount. The appraisal is ordered by the lender and doesn’t require your input other than payment. Check with your lender regarding the cost.
Homeowner’s Insurance Your Lender will require a commitment for insurance that provides coverage against fire, theft and liability on the home
Title Insurance This an insurance policy that protects the owner of the property against loss that occurs from a defect in a title for real estate. Payment of Title Insurance is negotiated in the purchase offer and may be ordered by the buyer or seller.
Once the conditions above have been met, all parties will meet to sign the closing papers that will transfer ownership to you and exchange keys.
If one of your goals in 2013 is to become a Home owner in the greater Fort Wayne area, I would love the opportunity to meet with you and discuss your particular needs and help you find your new Home! Happy House Hunting and best wishes for a wonderful 2013.