Eyeing your first home?
Home buying can be a complicated process, much like everything else. A prospective home buyer would usually go through different phases of home buying before finally getting a close.
PHASE 1: AWARENESS
It is when you suddenly realize you do not want to be an apartment dweller all your life, hate paying off someone else’s mortgage and you start contemplating about buying a new home.
PHASE 2: INFORMATION
Once you realize the need, you now want to look for information to help you decide. You will seek more details about location, prices, amenities and features. You will begin looking for a reputable realtor to discuss this need and help you find properties that will fit into your budget, lifestyle and preferences.
PHASE 3: SEARCH
By this time, you are ready to scout the market. Equipped with all the information you need, you may start visiting open houses or ask your real estate agent to schedule you a tour on properties available in the market. This will allow you to check each homes in terms of location, lay-out, number of rooms, etc.
PHASE 4: EXPLORE FUNDING
You’ve found your ideal home and you’re ready to act on it. Next step is financing. There will be hundreds of mortgage lenders eager and ready to accept your loan application. But just because a lender accepts your application doesn’t mean it’s the right deal for you. It is very crucial therefore to do your research and read the fine print. Check what each of these lenders offer like ease and convenience, dedicated mortgage officers, competitive interest rates and other elements that will suit your needs.
PHASE 5: CHOOSING
The second equally important decision to be made is to know your home loan options. You may choose to avail of the different home loan programs offered by government or choose to work with your mortgage broker. Discuss with your realtor and lender the terms and conditions of the loan and compare each in terms of affordability, interest rates and monthly amortization.
PHASE 6: APPLICATION
After you’ve found your property, you can formally apply for a mortgage. The mortgage application will ask you questions about the property and your financial situation such as the address of the home you intend to buy, type, size, sale price, property taxes, etc. Be as honest and accurate with your application as possible, especially with financial issues to avoid delays.
PHASE 7: WAITING TIME
Now you get to sit back and wait for the approval. Once you have completed all the necessary paperwork, you may be able to get a feedback within 72 hours. Often, your lender will ask for more documents to support your income claims before it can grant you final approval.
PHASE 8: FINAL ACT
The next step is to make the down payment. This is the money that you put up front when you purchase a property. For home purchases, 20 percent is a significant number. Paying at least 20 percent allows you to avoid paying for PMI, which protects your lender if you default on the loan. If you are looking for a lower down payment, an FHA loan only requires a 3.5 percent down but you have to pay for insurance and you will need to evaluate whether or not you’re in a good position to buy if you’re short on funds.
Again, finding your dream home need not be such a stress and an agonizing experience. All it takes is careful, thorough research, good planning, financial discipline, and a dependable partner like Synergy Real Estate to see you through.