Any major purchase requires research, careful analysis, consideration, and thought. Home buying isn't any different! Determining the right location, the number of bedrooms or bathrooms needed, and outdoor space are the easier decisions to make in your home buying process. However, there are many other factors to think about in your home search. From your initial search to the moment you get the keys to your new home, we will be there, educating & guiding you through the process. We can even help connect you with mortgage professionals to get the best rates.
As area experts and natives, we can help educate you on the different neighborhoods, schools, and other local community amenities that suit your lifestyle.
Home Buying Can Be Easy
As buyer agents, We can help streamline the process of buying a home and make it easier for you. We've aligned ourselves with the top professionals in the industry, and once an offer has been accepted, we will personally help facilitate the process to close on the home. By working closely with mortgage brokers, title and escrow companies, home inspectors, home warranty companies, and builders we will provide you with the best service possible!
As soon as you can, start reading Web sites, newspapers, and magazines that have real estate listings. Make a note of particular homes you are interested in and see how long they stay on the market. Also, note any changes in asking prices. This will give you a sense of the housing trends in specific areas and inform you how quickly you need to have your Realtor write an offer to purchase when you find a home suiting your tastes. You will also need to check your credit score. Your credit score determines whether you can buy a home and at what APR (annual percentage rate) you will receive on your loan for housing purchase. Your Realtor should have connections with lenders who have debt consolidation programs to assist you in becoming eligible to purchase a home, and lenders who have programs for first time home buyers. If this is not your first time purchasing a home, you are aware of how your finances will affect your APR and will need to link up with a lender who can offer you the most out of your loan. Every home buyer has their own priorities when choosing a mortgage. Some are interested in keeping their monthly payments as low as possible. Others are interested in making sure that their monthly payments never increase. And still others pick a loan based on the knowledge they will be moving again in just a few years.
Lenders generally recommend that people look for homes that cost no more than three to five times their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other (revolving) debt.
But you should make this determination based on your own financial situation. Use our Mortgage Loan Calculator (Pioneer Realty Mortgage Calculator) to see how much house you can afford.
To help you save for your down payment, try opening a savings account with a high (APY) annual percentage yield, which makes it easy to put aside money each month and earn to the fullest.
Before you start looking for a home, you will need to know how much you can spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you just need to provide some financial information to your mortgage banker, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you how much we can lend you. This will tell you the price range of the homes you should be looking at. Later, you can get pre approved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.
Real estate agents are important partners when you’re buying or selling a home. Real estate agents can provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house.
Start touring homes in your price range. It might be helpful to take notes. Pioneer Realty has created a helpful checklist (PR home viewing checklist) for our buyers to use on all the homes you visit. You will see a lot of houses! It can be hard to remember everything about them, so you might want to take pictures or video to help you remember each home.
Make sure to check out the little details of each house. For example:
Test the plumbing by running the shower to see how strong the water pressure is and how long it takes to get hot water
Try the electrical system by turning switches on and off
Open and close the windows and doors to see if they work properly
It’s also important to evaluate the neighborhood and make a note of things such as:
Are the other homes on the block well maintained?
How much traffic does the street get?
Is there enough street parking for your family and visitors?
Is it conveniently located near places of interest to you: schools, shopping centers, restaurants, parks, and public transportation?
Take as much time as you need to find the right home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached agreement on a price, the house will go into escrow, which is the period of time it takes to complete all of the remaining steps in the home buying process.
There are many different types of mortgage programs out there, but as a first-time home buyer, you should be aware of the three basics: adjustable rate, fixed rate and interest-only.
Adjustable rate mortgages (ARMs) are short-term mortgages that offer an interest rate that is fixed for a short period of time, usually between one to seven years. After that, the interest rate can adjust every year up or down, depending on the market. These are good for people who don't plan on living in their home very long and/or are looking for a lower interest rate and payment.
Fixed-rate mortgages are more traditional and offer a fixed interest rate (and thus a fixed monthly payment) for a longer period of time, usually 15 or 30 years, though they're available in 20- or 25-year terms. These are good for people who like a predictable payment and plan on living in their home for a long time.
Both fixed and adjustable rate mortgages can have an interest-only payment. What this means is that for a certain amount of time during the loan term, you're allowed to pay only enough to cover the interest portion of your payment. You can still pay principal when you wish, but don't have to if your budget is tight. There is a myth that with interest-only mortgages, you don't build equity. This is not necessarily true, since you can build equity through home appreciation. The benefit to interest-only mortgages is that you increase your cash flow by not paying principal.
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing. Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
You will receive a report on the home inspector’s findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale or re-negotiate pricing. Before the sale closes, you will have a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.
Lenders will arrange for an appraiser to provide an independent estimate of the value of the house you are buying. The appraiser is a member of a third-party company and is not directly associated with the lender. The appraisal will let all the parties involved know that you are paying a fair price for the home.
As you can imagine, there is a lot of paperwork involved in buying a house. Your lender will arrange for a title company to handle all the paperwork and make sure that the seller is the rightful owner of the house you are buying by conducting a deed search.
At closing, you will sign all the paperwork required to complete the purchase, including your loan documents. Be sure you talk to your mortgage banker to understand all the costs that will be involved with the closing so there are no surprises. Closing costs will likely include (but are not limited to) your down payment, title fees, appraisal fees, attorney fees, inspection fees, and points you may have bought to buy down your interest rate. It typically takes a couple of days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller, you are ready to move into your new home!
Curious about what’s happening in your neighborhood? You can create a custom market report to see what’s active, under contract, and sold in your neighborhood!
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Contact us today to find out how we can be of assistance to you!