|
The Home Buying Process
Buying a home can be a complex process involving several important steps.
Financing
Pre-qualification: This should be the first step in any home buying process wether it is your first home or your sixth. Knowing how much you can afford is the first step in finding the home that is right for you and your family. The pre-qualification process is a simple and quick process that can be taken care of by a mortgage professional. Click here to see a list of recommended professionals.
- FHA/VA- This is a loan that is insured by the federal government.
- Adjustable Rate Mortgage(ARM)- Rate which rises and falls based on the prevailing interest rate
- Fixed Rate – Rate which is fixed for the life of the loan
- Convertible ARM- starts as an ARM and becomes a fixed rate after a predetermined number of years.
For more information on loans and financing options click here
Finding the right home for you
Finding the right home for you is an exciting process. There are several things to consider when making your first home investment
Price: Finding a home in your price range is key tokeeping your home purchase from becoming a nightmare. It is recommended that your payments be around 25% of your take home pay, and no more then 1/3 of your take home pay. Visit our calculator to see what recommended for you. (link to mortgage calculator- on that page have a link to contact or search properties in that area with that price range)
House size and accomadations- Finding the right home for your family should be based on your current space needs, with a view of futre growth. There are cost of selling and buying, it might be a better idea to buy that larger home if your family is going to need it in a year.
Location: Location Location, Location- The old adage is still true in the 21st century, location does matter and will affect the price of your home now and in the future. Having a home in a location that is likely to appreciate will protect your investment and help when you want to move up in house.
- Location to major freeways and large roads
- Comuting distance
- Access to stores and entertainment
- Possible future development
- Current upkeep of the neighborhood
Things to look for in a good location:
In order for an offer to be legal it must be in writing. In Utah there is a standard Real-estate Purchase Contract (REPC) that is used in most real-estate transactions. A offer does not just includes the purchase price. It also important dates like closing, inspections, and other contingencies that protect you and your earnest money deposit. The earnest money deposit is to impress upon the seller that the buyer “earnestly” wants to purchase the property and in some cases can become non-refundable for certain reasons. This is why it is important to have someone with knowledge and experience help you write the offer.
Once the offer is written, the buyers agent submits the offer to the Sellers Agent who then present the offer to the Seller.
Acceptance, Rejection, or Counter –Offer
When a Seller receaves a offer to purchase, they have 3 options. They can Accept the offer as is from the buyer. The Seller can reject the offer out right. Or the seller can make a Counter-Offer (which is the most likely of the three to happen).
Depending on the initial offer and the counter offer it may take several Counter-Offers from both sides to come to an agreement. Depending on the current market conditions the Buyer or Seller may have an advantage in the negotiating process, and may be able to demand more consessions from the other side.
Once the offer has been accepted by both sides, the next step in the home buying process begins.
Inspections and appraisal
You will need an appraisal unless you are paying for the home in cash. The lender is usually responsible for setting up an appraisal. The appraisal substantiates that the offer price is not higher than the value of the home insuring that your investment is a good one.
Home inspections are always a good idea. A good home inspector will look at the houses Structural components, Exterior Components, Roofing, Plumbing, Electrical, Heating, Air- Conditiong and Heat Pumps, Interior features, and the Insulation and Ventilation.
Having a home inspection done by a licensed professional is well worth the money. It can save you thousands in unforeseen repairs.
Finalize Financing
Once the offer is accepted the loan must be finalized. This can be a lengthy process depending on the situation and the is usually the cause for extensions on the deadlines.
Your mortgage broker will require several documents to finanalize the loan. Most lenders will need to verify employement, your current assets, and your current debts.
Click here to find out how to buy a house with John
