It is the optimal phase for purchase of new home. If you're curious to purchase a new home, start with a to do checklist to be successful in your endeavor and stay organized with your home search process. Though globally applicable, certain agencies and websites specified in this post are geared towards USA and Canadian Home buyers.
1) Get a free copy of your credit report. It is very important. It can be obtained from websites like www.annualcreditreport.com
2) Know your rights and eligibility. For more details visit Housing Unit Development website www.hud.gov/buying/loans.cfm
3) Look out for mortgage companies. Some banks like Chase offer 1% cash back in your mortgage (contact chase representative to find more details. I just found a flyer in my mail box today. I'm not sure about terms and conditions. Just wanted to share the information with you all). Research a lot and find out mortgage companies. Look out for best interest Rates
4) Know what loans are available for a first-time home buyer. Common form of loans include 30-year fixed rate mortgage which is the most popular loan option, 15-year fixed mortgage, 10-year fixed mortgage whose mortgage rate remains fixed throughout the life of the loan. There are variable interest rate options including 3/1 year ARM, 5/1 year ARM, 7/1 year ARM wherein the interest rate remains constant for 3,5,7 years. After this based on market conditions the rates vary. while determining the best option for you look for principal and interest rate split-up details in EMI chart. This will tell you more details on which one will offer you great benefits. The mortgage interest can be deducted towards your federal income taxes. To know more on this contact your tax filer to get to know how much you can earn back in form of ta credits. Note that in addition to mortgage interest property taxes are also tax deductible
5) Get pre-approved from mortgage broker, bankers, federal credit union who offer home loan, mortgage products. It is to be noted that the pre-approval is the first step needed for your home search process. Also, it is not mandatory for you to stick onto one single mortgage broker. Just like shopping, shop around for cheapest rates, incentives in form of $0 loan officer fees, $0 closing cost, points purchase that will lower down your overall interest rates erc
6) Know your affordable limits. Calculate your own budget. Make sure that you dont default in future. In a way pre-approval limit does gauge your financial condition and provides some inputs on how far you can stretch your limits with home purchase
7) Make a decision on if you're going for a new home, resale old home or foreclosure home that becomes available via auctions, sherifs sale etc in your local county office, new homes sold by builders, home sold by owner themselves and such different type of homes . I spoke to mortgage loan officer last week and they confirmed that we can get loan for all types of homes including foreclosure homes. There is a common thought in market that foreclosure deals can be honored only in the form of all cash deals. This is not correct
7.1) Type of home - Based on your financial situation, current job position determine type of home you want to settle down. This can be single family home, town home, apartment condo, co-ops , mobile homes etc
8) Check out the local school districts. It is very essential (if you've small kids). I checked with a neighbor recently and they mentioned that while checking the school rating the primary item to look out for is always high school rating as that plays essentially important role in determining the future of your kids
9) Start looking at homes. Typically this starts working with realtor, roaming around your neighborhood on evenings, weekends to see sale boards that talk about homes sold by builders directly, homes sold by owner etc
10) Visit the place and talk to neighbors in that area. You will get to know more details as a stranger if you are totally new to the locality
11) Neighbourhood is very essential for a peaceful life. Get your local crime report, details on radon gas leakage, environmental issues etc. These details are essentially included as part of home inspection report. But it is better to be proactive and have good insight on this before you zero down the locality
12) Pick a real estate agent. It is optional . It is highly recommended for new home buyers if you are not 100% sure. In north american countries almost 90% of the sale process starting with home search all the way upto closure happens only with the help of realtor
13) Find an attorney. In many cases the title check is to be done by real estate attorney. Your realtor works with such attorneys. Also, mortgage bankers work with title check, attorney review, appraisers, home inspectors and you can get some bulk discount on such home related service package. Always shop around and look for best pricing package
14) Check comparable sales in neighbourhood
15) Make an offer
16) Start negotiating. Don't hesitate to drop the proposal if you're not interested in proceeding further
17) Ask the seller to purchase a home warranty
18) Sign the contract
19) Apply for homeowner's insurance
20) Get the home inspected. be careful while inspecting home
21) Set a closing date. Be prepared with closing costs
22) Do a final-walk through of the home. You're done.
1) Get a free copy of your credit report. It is very important. It can be obtained from websites like www.annualcreditreport.com
2) Know your rights and eligibility. For more details visit Housing Unit Development website www.hud.gov/buying/loans.cfm
3) Look out for mortgage companies. Some banks like Chase offer 1% cash back in your mortgage (contact chase representative to find more details. I just found a flyer in my mail box today. I'm not sure about terms and conditions. Just wanted to share the information with you all). Research a lot and find out mortgage companies. Look out for best interest Rates
4) Know what loans are available for a first-time home buyer. Common form of loans include 30-year fixed rate mortgage which is the most popular loan option, 15-year fixed mortgage, 10-year fixed mortgage whose mortgage rate remains fixed throughout the life of the loan. There are variable interest rate options including 3/1 year ARM, 5/1 year ARM, 7/1 year ARM wherein the interest rate remains constant for 3,5,7 years. After this based on market conditions the rates vary. while determining the best option for you look for principal and interest rate split-up details in EMI chart. This will tell you more details on which one will offer you great benefits. The mortgage interest can be deducted towards your federal income taxes. To know more on this contact your tax filer to get to know how much you can earn back in form of ta credits. Note that in addition to mortgage interest property taxes are also tax deductible
5) Get pre-approved from mortgage broker, bankers, federal credit union who offer home loan, mortgage products. It is to be noted that the pre-approval is the first step needed for your home search process. Also, it is not mandatory for you to stick onto one single mortgage broker. Just like shopping, shop around for cheapest rates, incentives in form of $0 loan officer fees, $0 closing cost, points purchase that will lower down your overall interest rates erc
6) Know your affordable limits. Calculate your own budget. Make sure that you dont default in future. In a way pre-approval limit does gauge your financial condition and provides some inputs on how far you can stretch your limits with home purchase
7) Make a decision on if you're going for a new home, resale old home or foreclosure home that becomes available via auctions, sherifs sale etc in your local county office, new homes sold by builders, home sold by owner themselves and such different type of homes . I spoke to mortgage loan officer last week and they confirmed that we can get loan for all types of homes including foreclosure homes. There is a common thought in market that foreclosure deals can be honored only in the form of all cash deals. This is not correct
7.1) Type of home - Based on your financial situation, current job position determine type of home you want to settle down. This can be single family home, town home, apartment condo, co-ops , mobile homes etc
8) Check out the local school districts. It is very essential (if you've small kids). I checked with a neighbor recently and they mentioned that while checking the school rating the primary item to look out for is always high school rating as that plays essentially important role in determining the future of your kids
9) Start looking at homes. Typically this starts working with realtor, roaming around your neighborhood on evenings, weekends to see sale boards that talk about homes sold by builders directly, homes sold by owner etc
10) Visit the place and talk to neighbors in that area. You will get to know more details as a stranger if you are totally new to the locality
11) Neighbourhood is very essential for a peaceful life. Get your local crime report, details on radon gas leakage, environmental issues etc. These details are essentially included as part of home inspection report. But it is better to be proactive and have good insight on this before you zero down the locality
12) Pick a real estate agent. It is optional . It is highly recommended for new home buyers if you are not 100% sure. In north american countries almost 90% of the sale process starting with home search all the way upto closure happens only with the help of realtor
13) Find an attorney. In many cases the title check is to be done by real estate attorney. Your realtor works with such attorneys. Also, mortgage bankers work with title check, attorney review, appraisers, home inspectors and you can get some bulk discount on such home related service package. Always shop around and look for best pricing package
14) Check comparable sales in neighbourhood
15) Make an offer
16) Start negotiating. Don't hesitate to drop the proposal if you're not interested in proceeding further
17) Ask the seller to purchase a home warranty
18) Sign the contract
19) Apply for homeowner's insurance
20) Get the home inspected. be careful while inspecting home
21) Set a closing date. Be prepared with closing costs
22) Do a final-walk through of the home. You're done.
