If you’re beginning to feel cramped in your rented space, it might be time to consider purchasing a home! However, thinking of taking on this task may feel a bit overwhelming. Here is a checklist to help you through the process:
1. Reach out to a real estate agent in your area. This one is a biggie! A buyer’s agent will help you understand the process, and communicate in your best interest with the home’s sellers, lawyers, etc. They also have a wealth of knowledge about the area you’re house hunting in, so they can find homes that will best suit your needs. It isn’t required to have a buyers agent when you are house hunting, but it’s a great idea if this is your first experience buying a home.
2. Determine a price range you can afford. You may have seen on house hunters that the budget is a large factor in the home buying process. You don’t want to waste time looking at homes that you are unable to afford. When you meet with the bank, they will only allow you to borrow what you can pay monthly for your mortgage based on your Debt to Income Ratio (DTI), or how much you make vs. how much is going out every month. Knowing this number will help you and your real estate agent find a home that is right for your budget.
3. Get Pre-approved for your home loan. Having an approved lender in place before you start looking for a home puts you in a better position once you want to make an offer on the home of your dreams! This process includes getting your credit checked and verifying your income. Having a preapproval letter ready when communicating with sellers makes you a more desirable candidate to purchase from.
4. Make an offer! This is another time when having a buyer’s agent comes in handy! They will help you navigate making an offer on the home that is respectful to the sellers but also details clear expectations on your behalf. It will also include what’s called an “earnest money deposit” which is usually 1-3% of the purchase price. This small deposit shows that you are serious about your offer to the seller.
5. Schedule inspections and appraisals. Once you and the seller have agreed to the terms of the offer, the next step is to schedule a home inspection professional to do a series of tests and inspections to make sure the home is in adequate shape, and just as the seller advertised. An appraisal will also be conducted by your bank to ensure they’re not taking on a loan for more than the property is worth. Having inspections and appraisals done on time will help you as the homebuyer be informed about this large purchase, and can also be a bargaining chip if you need to renegotiate your offer based on the results of the inspections.
6. Close on your home and purchase homeowners insurance. Now is the time to finish the process and finally get the keys to your new place! During closing, be prepared by knowing what you owe out of pocket for closing costs and purchase homeowner’s insurance to help protect your investment. The best way to learn about the insurance coverage needed for your new home is to get in contact with an independent insurance agent, like the experts at The Insurance Center! An independent agent can shop different insurance carriers and help you understand the coverage you need for your new home.
7. Move into your new home! Now that you’ve successfully purchased your first home, it’s time to move in! This is the easiest part of the process. Find some friends and family, offer to pay them in pizza, and move in!
The Insurance Center is here for you as your dedicated insurance agent when buying your home. You can find out more about the insurance policies we have to offer by visiting our website, or calling our office at (252) 639-2407. Our agents are available to help you understand the unique needs of your home and ensure that you and your family are properly protected!