Buying a house can be an emotional process so you need to take this step with caution. If you go into this without any information or knowledge then you might not like the house that you end up getting but if you do your research beforehand then you might just end up with your perfect house.
Should I Buy a House?
This is the question that everyone asks themselves. Home ownership is something that you can be proud of. But it is a responsibility too. You need to consider your stability and source of income.
You need to consider whether you are ready to settle down and take roots in a particular place or whether you are prone to travel. All these questions should be considered before you go and buy a house.
When Should I Buy a House?
Well, most people tend to buy their houses in spring but since the coronavirus ruined everything, now that traditional rule does not apply. The sales year has been pushed to summer or fall.
Except for the season you also need to consider whether you are ready to buy the house financially. You need to keep aside some extra cash other than the cost of the house for the closing payment.
You also need to make sure that you get a smooth mortgage. These all will help you in the long run. Also, put money aside for maintenances and such.
How to Buy a House in 2021?
Well if you have decided to buy a house in 2021 then you will definitely find this article useful. Buying a house is kind of a big deal.
It’s exciting but you need to put a lot of work and effort into it. We will tell you how to buy a house step by step. Make sure you go through all these steps though.
1. Understand Why You Want to Buy a House
If you are not clear on to why you want to buy a house then you need to get it clear. It is a major decision of your life and it should not be taken lightly.
You need to ask yourself these questions before you just go and buy any house. You should also be prepared to make the necessary maintenance of the home. This is the primary step in the direction of buying a house.
2. Check Your Credit Score
This will help you determine the financing options. Lenders will use it to see how many loans that you can take along with other things.The better your credit score the better your chances of getting a good loan.
Equifax, Experian, and TransUnion are 3 companies that will provide you with your credit score for free once a year. So make sure that you put that to good use. You can also get it from your bank for free.
3. Create a Housing Budget
This is a very important step. You need to create a housing budget at all costs. It is a must. This will allow you to know well that what you can afford and how much your all-in cost will be.
The price of the house isn’t the only thing that you need to consider. Please consider other factors too like mortgage or moving expenses or closing in expense.
4. Save For a Down Payment
You need to save for the down payment of the house in order to avoid private mortgage insurance or PMI. Save at least 20% of the home’s purchase price for a down payment.
This is advised to be done almost all the time. It is better to be safe than sorry. So keep that down payment ready.
5. Shop For a Mortgage
You should get a mortgage ideally before you go to buy a house. This will help you only. The mortgage will be helpful when you make an offer on a house.
It will make sure that your claim is noticed. And it will give you a firm handle on how much you can actually afford.
6. Hire a Real Estate Agent
A real estate agent can help you a lot to be honest. They can find you your dream house and then also negotiate with them on your behalf. It will be easy because you won’t have to do it yourself.
Some people are not so good in this negotiation stuff but that’s completely fine. You can just hire a good real estate agent for yourself. They will do the job for you.
7. See Multiple Homes
Well, you can not just decide on a house by looking at the pictures. You need to go there yourself and check out the house in person. You should go to all the houses that you are interested in and then check them out one by one.
Keep an eye out for the neighborhood as well as the amenities that you can get around the house. Drive around your desired neighborhood to see the offers available. Search for it online or ask your real estate agent to do it for you.
8. Make an offer
You should know how to make a good offer. This will help you in getting the seller to accept your offer and then you can finally have your dream house.It is not an easy method to make an attractive offer on a house.
You should prepare a complete offer package, including your offer price, preapproval letter, proof of funds for a down payment (this helps in competitive markets) and terms or contingencies.
Adding a personal letter for the seller can also help the offer you made stand out more than the others.
9. Get a Home Inspection
Get a home inspection. Many people do not do this. I don’t know why but it is very important. It tells you about the structural and mechanical issues with the property. This can affect your buying decision.
If you skip the home inspection then that can also mean that there is trouble for you in the future. It is important to hire a good home inspection. You need to get this done. No buts.
10. Negotiate Repairs and Credits
The home inspection report is important. This will reveal the issues of the house. It can be minor or major. Major issues need to be dealt with before you can get the loan from your lender.
Minor issues can be fixed after you move in though. This is why we stated that it is important to do a home inspection. Depending on it you can negotiate with the seller.
11. Secure Your Financing
Generally, it takes a month to complete the financing process. You need to provide your lender with all the documents that they need because otherwise there will be a delay and you won’t get the loan.
Responding quickly to any request for any documents can help speed up the process. Check the details yourself to see if there is any mistake or not. Some of the documents that you need to provide is mentioned below –
- Bank statements
- Additional proof of income
- Tax returns
- Gift letter or written statements that explains the major deposits into your bank account
12. Do a Final Walk-through
This is the final process before the house becomes your own. Make sure that you ask all of your questions in this tour. All the doubts should be cleared and you should be satisfied with the house.
Check the repairs if you have had any done. Voice and address any issues (if there are any) right now so that there is no problem later on.
A useful tip is to take your real estate agent with you. They can act as a witness. They can also help you answer your questions.
13. Close on Your House
Now we have arrived at the final step. Once everything is said and done and you are satisfied with the house then your closing agent will give the green light to close. This will make the deal complete and you will be the owner of the house.
Conclusion
We hope that you found this article to be useful. We tried our very best to explain the steps in detail and in simple language too so that everyone can understand the different housing terms used.
This is a great decision in life so you need to be extra careful while buying a house. We have mentioned that before but we can never stress that enough.
We hope that you enjoy your new home and that you and your family is satisfied with it. It can sometimes seem like a long and lengthy process but it is definitely worth it.
Do share your thoughts in the comment section below. Also if you liked this article then please consider sharing this article with others who are willing to buy a house in 2021 too.