Home Buying 101: A Beginner's Guide
Buying a home is a significant investment, and for many people, it's a lifelong dream. However, navigating the homebuying process can be overwhelming, especially if you're a first-time homebuyer. In this beginner's guide to homebuying, Frank Pinho, a mortgage lender with Paramount Residential Mortgage Group, Inc. will walk you through the process step-by-step, from getting pre-approved for a mortgage to closing on your new home.
Step1: Determine Your Budget
Before you start shopping for a home, it's essential to determine how much you can afford. The first step in this process is to get Pre-Approved for a mortgage. A pre-approval with PRMG, Inc. will give you a qualified amount that us as a lender are willing to loan you based on your income, credit score, tax returns, and bank statements.
When determining your budget, you'll also need to consider other expenses, such as closing costs, property taxes, and homeowners’ insurance, which we will go over with you as part of the process. These are all very important factors, that as a mortgage lender, we consider when working with you to find your budget. We even take this one step beyond our competitors! We then submit this documentation to our in-house processing and underwriting team to get a conditional loan APPROVAL. Yes, that’s right; a full conditional loan approval before even submitting an offer on your dream home!
Step 2: Start House Hunting
Once you've determined your budget, it's time to start looking for your dream home. You can begin by searching online for homes in your price range and preferred location. You can also work with a real estate agent who can help you find homes that meet your criteria. If need be, we can match you with a trusted realtor in the neighborhoods you are looking.
When you find a home you're interested in, schedule a viewing with your agent. During the viewing, take note of any issues or concerns you have about the home. You should also take the time to explore the surrounding neighborhood to see if it's a good fit for you.
Step 3: Make an Offer
When you've found the perfect home, it's time to make an offer. Your real estate agent can help you prepare a formal offer that outlines the price you're willing to pay, any contingencies ,and the closing date. The seller can either accept, reject, or counter your offer.
If your offer is accepted, you'll move on to the next step in the process. If it's rejected, you can either make a new offer or move on to another property.
Step 4: Complete the Inspection
Before closing on a home, it's essential to have it inspected by a professional. The inspector will evaluate the home's condition and identify any issues or potential problems. If significant issues are found, you may be able to negotiate repairs with the seller.
Step 5: Close on Your New Home
Once the inspection is complete, and any necessary repairs have been made, it's time to close on your new home. Closing involves signing a lot of paperwork, including the mortgage agreement, property deed, and other legal documents. This is when that conditional approval turns to a full loan approval with document signing and a final transfer of funds.
During the closing process, you'll also need to pay closing costs, which can include attorney fees, appraisal fees, and title insurance. You should be prepared to pay around 2% of the home's purchase price in closing costs. This will be broken down and explained during the process!
Final Thoughts:
Buying a home can be a complicated process, but with the right guidance and preparation with PRMG, it's possible to find your dream home tomorrow! Remember to work with a trusted lender and real estate agent, and have the home inspected before closing. By following these steps, you'll be well on your way to homeownership.