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Home Buyer's Resource

Buying a new home can be an intimidating experience. Here are some of the major steps and things to consider when buying a home.

1. Before you buy consider what you can afford.money-jar

a. Before you jump into the home buying process decide if you are financially ready to buy a house. Really take a look at your income, expenses, and debt. Order a free copy of your credit report from the 3 major credit reporting agencies (Equifax, Experian, and Trans Union).

b. Take a home buyer’s seminar/course. There are many offered all over New Hampshire. The New Hampshire Housing Finance Authority has some posted on their Events page of their website: http://www.gonhhfa.com/events

2. Apply for a mortgage loan.

a. You will want to meet with a mortgage loan lender to begin the loan application process. At this stage in the home buying process you will obtain prequalification and/or pre-approval for your mortgage loan and find out how much you can spend on a home.

i. Prequalification means your income and debt have been reviewed, but have not been verified. This is a rough estimate of what you can afford.

ii. Pre-approval means that the lender has verified your income and credit. You may be charged a fee to cover the cost of credit report. You should receive a letter stating how much the lender is willing to loan you.

b. Places that typically offer mortgage loans include banks, mortgage companies, credit unions, some non-profit organizations, and some government agencies.

3. Shop for your new home.

listing-magazine

a. Think about what you want in a home and make a list. Include things like how many bedrooms and bathrooms? A basement? A porch? What kind of neighborhood do you want to live in? Close to schools? Or close to work? Or both?

b. Consider teaming up with a real estate professional to help you find the home you’re looking for. There are a few different types of real estate professionals including Realtors®, Brokers, and Agents.

i. A real estate agent is licensed by the state and works under the supervision of a real estate broker.

ii. A real estate broker is licensed by the state to own and operate a real estate agency.

iii. A Realtor® is a licensed real estate professional who is a member of the National Association of Realtors®.

c. There are many ways to shop for a home. A popular place is the internet where many real estate companies and other websites post available listings. The newspaper frequently advertises local public open houses. Real estate shopping guides are often located in stands at grocery stores, restaurants, and shops. Also, driving by the neighborhood(s) you might see property signs of homes for sale.

4. Make an offer on a home.

house-handsa. Once you’ve found the home you’ve been looking for and you want to buy it you need to make an offer. This may be a full price offer, or you may try to negotiate a lower price. Your real estate professional can help you make the decision.

b. At this point the real estate professional will prepare an offer with you to submit to the seller or seller’s agent which includes many items such as the price offer, the amount you’re willing to pay as a “good faith” deposit, the address and description of the home, any contingencies, and a time limit to accept the offer.

i. Contingencies are those things that need to be met before buying the house, such as obtaining financing, a home inspection, or selling a currently owned house before buying the new one.

c. The seller may accept the offer, make a counter offer, or reject the offer.

5. Get a home inspection.

a. It’s important to get a home inspection before finalizing the purchase in case there is something really wrong with the house you didn’t see during a showing.

b. Things a home inspector will be looking at during a home inspection include the foundation, the roof, ceilings, doors, windows, walls, floors, the plumbing and septic system, heating, the electrical system, insulation, and ventilation.

c. Depending on how the home inspection turned out you may wish to cancel your offer, or revise the purchase and sales agreement if the seller is willing to make any necessary repairs, or subtracting the cost of the necessary repairs from the total cost of the home if you’ll be making the repairs as the new owner.

6. Complete the mortgage loan application.application

a. Once an agreement has been made regarding the price and the outcome of the home inspection and you’re set to move forward, the next step is to complete the loan application process you begun previously. This will involve signing a written application form, providing any additional documents to the lender, and often paying a fee for the lender to obtain an appraisal and a survey if it’s necessary.

b. The loan company will process the application and documents and let you know if you’ve been approved and on what conditions.

c. Some conditions that might be involved with a loan approval include insurances, a clear title report, a survey, and any other inspections such as for radon, lead paint, or water quality.

7. Close on the mortgage loan.

sign-document

a. Once approved you’ll need to close on the loan. This is when the seller receives the check for their home, and you’ll receive the deed to the property.

b. Some things to do when preparing for the closing are taking a final walk-through of the home to make sure the house is in the same condition as when the offer was made, receive the HUD-1 Settlement Statement and obtain a cashier’s check for the amount, meeting with the lender to sign the mortgage papers, and calling utility companies to have them transferred and turned on for when you move in.

c. At the closing you will sign several documents including binding contracts. Take the time you need to make sure you understand what you are signing.

8. After you buy a home.door-lock two

a. Before moving into your new home you should change the locks and get new keys. You should also check to see that the smoke detectors all work and have fresh batteries. Make sure you know where the main cutoff valves for the water and gas are. Learn where the main electrical switch and circuit breakers are. Make sure you have a fire extinguisher and that it’s easily accessible.

b. At this point you’re probably ready to move-in. Congratulations!

 

References:
Barrell, D. (2009). Realizing the American Dream. (4th). Washington, DC: NeighborWorks America.
New Hampshire Housing Finance Authority. (n.d.). Your Guide to Home Ownership.