For many, home ownership is a rite of passage. Owning your own home shows the world that you have grown up. At the same time, the whole process seems to be a complete mystery. Do you buy a pre-existing house or try to design your own? Should you contact trusted house builders in Greenville, SC, to create your own home from scratch? How much do you need to put down for the down payment? How much can you afford? The questions are endless. Many people have no idea where to even start.
Do not worry; you aren’t the only one who feels a little lost in the housing market. In fact, you could ask any home buyer about their first home, and you will see many of them were unprepared. Creating a checklist for your home buying journey will make life a lot easier for you.
The right checklist can save you a lot of headaches and prevent a lot of problems for you as you search for your dream house. Take each task step by step, and you’ll be on the road to home ownership before you know it.
- How Much Can You Afford? Determine Your Budget!
The obvious first step in buying a home is understanding how much you can spend on a home. Unless you are a millionaire, it is unlikely that you can just decide to buy a home without making a budget. Look at your current budget, take these things into account:
- Write out how much you are currently spending on your mortgage or rent.
- Look at your debt ratio. What monthly payments do you make? Include utilities, car payments, auto insurance, groceries, and any other monthly bills to see how much room you have for a new payment.
- Do not forget closing costs! Factoring in closing costs is something many people forget. These costs tend to be around 2% to 5% of the home value.
Once you know how much money you can pay for your mortgage, you can start looking for a home to fit your budget. The smartest option is to choose a home mortgage that is no more than 28% of your gross income. Your gross income is what you are paid before taxes and personal benefits are taken out. A professional lender can help you understand your budget before you take out any loans.
Some home buyers look for a home before they budget and end up in default on their home loans. Create a reasonable budget for your new home and stick to it.
- Do a Credit Check-Up
Credit reports are often part of the loan process. However, it doesn’t hurt to do a pre-loan check-up. Fix the mistakes and pay off any extras you find to get you ready for a home loan.
- Save Up and Prepare for Pre-approval.
The more you can put towards a down payment on a house, the more likely you will be pre-approved for a loan. Most lenders look for at least 20% down for any home loans. You can speed things along if you have the right paperwork when you ask for your loan. Bring these documents with you:
- Proof of Your Assets. Bring proof of assets like cars, boats, other homes, cash on hand, savings accounts, or money market accounts.
- Proof of Your Income- You can bring tax documents, but paystubs are the best option to prove your income.
- Verification of Employment: A letter of verification from your boss shows you are a reliable person.
- Start Searching for Your Dream Home.
If you are looking for new construction homes near Greenville and Spartanburg, South Carolina, you know the market can be tight. House builders are always busy building dream homes for new home buyers. Start your search as soon as you have your loan pre-approval so you can beat out the competition. Here is how:
- Check online for pre-existing homes or custom home guilders near Greenville, SC, or Spartanburg, SC.
- Drive through your favorite neighborhoods at different times of the day and different days of the week. You might find issues with the neighborhood that you do not like.
- Talk to your friends, co-workers, and family about homes and neighborhoods. Their good or bad experiences could save you a lot of money.
- Consult different agents. An experienced agent or trusted house builder can save you a lot of money and trouble during your house-hunting days.
- Find a Realtor You Trust.
Realtors understand the housing market in ways you cannot even begin to imagine. Their experience will help you find the perfect home and negotiate a reasonable price when you purchase.
- Visit Multiple Open Houses.
Buying a house can be confusing and exhausting. Visiting multiple homes can help you identify options you really dislike and items you cannot live without. When you go, make sure you do the following things:
- Be open and ask any questions about the house.
- Bring your own measuring tape to measure doorways, nooks, and special spaces.
- Do not get emotionally attached to a house.
- Submit Your Offer
As soon as you find a home that fits your budget and ticks the right boxes, jump right in. Submitting your offer as early as possible will help you nab the house you love before other offers come pouring in. Your offer should include:
- Your offer price
- Disclosures on the state of the house
- A timeline for closing
- Preparations for negotiating price
- Home Inspections
Now that you’ve made your offer, you can have the home inspected. Inspections will help you identify issues with the house that might affect the offering price you make for the home. Standard inspections include inspecting:
- The Roof
- Visible Insulation
- Interior Electrical Wiring and Plumbing
- Doors and Windows
- The Attic
- Walls, Floors, and Ceilings
Once you’ve entered in an offer, many lenders will go ahead with appraisals. An independent home appraiser will inspect the home and look at different parts of the home. They will consider the comparable sales, square footage, appearance, and condition of the home as well as other amenities.
After inspections and appraisals are finished, you have three options. If there are not any major issues, you can simply continue with your original offer. If you notice some major problems but you still want the home, you can renegotiate. You can either ask for the seller to drop the price or ask for them to make the repairs before you move into the home. Sometimes you will need to walk away. Some sellers refuse to budge and you don’t want a house that is broken-down or over-valued.
- Closing Day!
You have been approved, the seller has accepted your price, and everything is ready to go forward. You have made it! On closing day, all the parties involved will sign paperwork and transfer the ownership of the house. You will see a lot of different documents, but you don’t need to get confused. These are some of the items you will come across as you close your deal.
- Settlement Papers: These papers are a summary of your fees and charges.
- Promissory Note: A legal I.O.U., the promissory note shows the loan terms, dates for payment, and where you will send your future payments.
- Deed: The deed officially transfers ownership to the buyer.
Buying a home can be a struggle or an adventure. When you do the research early and find the right house builders or real estate agents, you don’t have to worry. If you have more questions or are ready to start designing your dream home, contact the experts at Enchanted Homes. We are here to help you every step of the way. Call us today at 864-895-0601.