Step 1 - Do Your Homework
The earlier you can start with your new home research,the better. Research the areas that you have interest in living. Look at the homes in your target market area and watch the housing prices. You want to get a good feel for home values. Compare sizes, number of bedrooms and bathrooms, other amenities and square footage. Is the house updated with newer features like granite counters and stainless appliances. Is there a pool?
Once you have a feel for comparable pricing, watch to see if home prices are increasing or decreasing so you can understand the trends in your target areas.
Step 2- Determine How Much Of A House You Can Afford
There are different schools of thought for how much you should spend on your home. One says and I agree, that you should not spend more than 3-5 times your annual income for a house.
There are a lot of factors that come into play and every case is different. Use our affordability calculator to the right to help you determine how much of a house you can afford.
Some things to keep in mind:
- Do you have steady income?
- How much of a downpayment do you have?
- Do you have reserves for major and minor repairs you might need to make?
- Can you provide the following
-Verification of income
-Bank statements showing sufficient funds to close
-Two years of employment history
How Much Of A House Can I Afford
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Step 3 - Get Pre-Qualified & Pre-Approved For A Mortgage
The easiest way to know how much you can qualify for is to contact your mortgage broker to get you pre-qualified for a mortgage.
In order for you to get pre-qualified, you only need to provide some financial information to your mortgage banker. Some of the things that they will ask you for is your income, the amount of savings that you might have and any investments that you may have.
Your information will be reviewed by a lender that will let you know how much they can lend you. Once you know how much of a loan that you qualify for, you will know the range of the homes that you should be looking at.
A Pre-Qaulification is the process by which a lender will tell you how much you can afford. They do not pre-approve until they verify that the information that has been presented is accurate.
The pre-approval process will involve providing financial documents (W-2 statements, bank account statements, paycheck stubs, etc.) so that your lender can do the due diligence and verify your financial status and credit.
Step 4 - Shop For Your Home and Make An Offer
Now that you know how much of a home you can afford, shop for and find the perfect home for you. It is sometimes helpful to take notes when shopping for a home.
Download this home shopping reference checklist, HERE
Make sure to check out the little details of each house.
- 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.
Step 5 - Contact CambridgeHomeLoan.com For Best Mortgage Home Loan Rate
CambridgeHomeLoan.com has a wide range of very competitively priced home loan programs and a reputation for exceptional customer service and client satisfaction. You will have many questions when you are purchasing a home and having one of our experienced, responsive mortgage professionals to assist you can make the process much easier. 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 that they will be moving again in just a few years. For immediate questions call 800-826-5077.
Step 6 - Have The Home Appraised
Lenders will arrange to have an independent appraiser provide an estimate of the value of the home that you are buying. The third party appraiser is not associated with the lender or buyer. The appraisal will let all the parties involved know that you are paying a fair price for the home.
Step 7 - Coordinate The Paperwork
There is a lot of paperwork involved is purchasing a home. Your lender will arrange for a title company to handle all of the paperwork and make sure that the seller that you are purchasing your home from is the rightful owner of the house that you are buying
Step 8 - Close The Sale
At closing, you will execute signature copies of all of the paperwork that is required to complete your purchase, including all of your loan documents. It will typically take a few days for your loan to be funded after the paperwork is returned to the lender. Once the check is delivered to the seller than you are ready to move into your new home.
Refinance and Mortgage Home Loan Advice
Most borrowers, whether they are purchasing property or refinancing their home, focus on their mortgage rate and loan terms rather than the type of lender