Have you ever dreamed of your dream house? Is it a loft apartment with a balcony in the middle of the city? A relaxing villa with pretty palm trees near the beach? Or a great Greek-style mansion with a wide front lawn? Whatever the picture of your dream home is, we’re sure you pictured it in your mind already, waiting to be realized.
Purchasing a house tops everyone’s bucket list and finding that dream home that feels like it was built especially for you is one of those life’s achievements. But along with it involves a lot of dedication and hard work, time-consuming searches and puzzling choices between “must-haves” and “really likes”.
But don’t be daunted when your dream property is faced with real-world dilemmas. It’s unavoidable and that’s what dreams are made of.
To smoothen your path of buying your dream home, we’ve prepared a helpful guide for you to follow when you’re planning and deciding to buy a real estate property. Here it goes:
1. Check out your finances.
To avoid unpleasant surprises, getting your personal finances ready is necessary. Every detail on your financial life needs to be declared. Take the initiative to obtain your credit report and try to settle negative issues on your record. Also, you need to figure out how much of a down payment you can make. Then, assess your income versus financial liabilities to figure out how much house you can afford.
Make thorough research a priority early on so you can kick start the dream home buying venture on the right foot.
2. Learn the best mortgage type for you.
Finding out which type of mortgage best fits you is incredibly important. The mortgage market is saturated with options to offer. So before you dive in, choose the right type to increase your chances of approval. Know the advantages and downsides of each because getting the wrong one could cost you thousands and even seriously damage your financial future.
3. Find a good mortgage broker.
A mortgage broker is your friend in the home buying process. They’ll make it easy and doable.
Keep an eye out for someone who would offer a wide variety of programs to get you the best deals. Ask specific questions about the process and find out the necessary fees you will have to pay until the closing of the loan.
Bear in mind that you would be sharing a lot of your personal information and would be putting a lot of trust in this person. Find a broker who will assist you and ensure you’re not making any mistakes along the way.
4. Secure a mortgage pre-approval letter.
If you don’t have a pre-approval letter at hand before you start looking for houses, that can be a mistake. Getting one requires some paperwork and takes a few days to get you verified. But once done, it can give you an advantage and make you stand out in the home buying crowd.
5. Start shopping for your dream home.
Many home buyers rush into the process unprepared without the information they need and end up unsatisfied with their purchase. While looking for your dream home, keep in mind these factors:
- Price: Shop the ones within your price range.
- Safety: Visit the area and take heed of the surroundings, especially at night.
- Community: Is access to public transportation important to you? How about good schools and sidewalks?
- Utilities: Where does the drinking water come from?
- House Interior: Pay attention to the ones that need renovations, especially the basement, kitchen and bathroom. Inspect the plumbing, heating, electrical and cooling systems.
A good real estate agent can guide you and help to figure out what home features you need and navigate through the home buying process.
6. Make an offer.
Providing expertise, a qualified mortgage broker will be your ally through this process.
First, set your offer price and determine how much you are willing to pay for. Putting this offer into writing is a wise act. By law, your realtor will then tell the seller about your offer. If it’s yes, then congratulations! But if it’s no, then a negotiation can be done.
Find out about other offers that may have been put forward to help you figure out how much to offer or you may decide to increase your offer. Make sure that the contract protects your interests to withdraw your offer if the home inspection uncovers major problems.
7. Have all the mortgage application documents ready.
There are various documents you may need to apply for a mortgage depending on your unique situation. Here are some you might need:
- Tax Returns. To make sure your annual income is consistent with the earnings you have reported, lenders typically want to see your 2 years worth of tax returns. They’ll want to get the full story of your financial state.
- T-4s, Pay Stubs and other Proof of Income. These documents would help lenders evaluate your current earnings.
- Bank Statements and other Assets. Lenders will check if you have the necessary funds of reserved mortgage payments in your account in case of crisis and make sure that your down payment has been there for at least a few months and didn’t just appear overnight.
- Credit History. To evaluate what kind of risk you are, lenders often gather your credit report with your permission. You are also required to explain any blemishes that might include there.
- Photo ID. To prove that you are who you’re claiming to be, you probably need to provide a photo ID such as a driver’s license.
However, the exact documents required could vary from person to person.
8. Close and get those keys!
This is the final step of your dream home purchase. It means that you’ve made it through the application process and secured your loan. This is also the time wherein the title would be passed from seller to you and all the needed legal documents would be signed. And that’s it, it’s time to move in. Congratulations!
The home buying process is a major undertaking, but it provides so much satisfaction once it’s done. It’s easy to get off-track because of so many things to be mindful of. That’s why finding a good mortgage broker is a worthy idea. A qualified mortgage broker can help you surmount the tricky stages of buying a home.