HOME BUYERS GUIDE - CHAPTER 1

        
A BRIEF INTRODUCTION TO  THE HOME BUYING PROCESS IN THE USA.


Dear Patrons,
Namaskar, 

Thank you for visiting our blog. I hope everyone had a great 4th of July. This new post will give you a condensed idea about purchasing  a residential property in the USA. I have tried to include all the details that you, as a prospective buyer, will need to consider before starting your house hunting adventure. 

Buying a house in America is not as hard as you think but is one of the most important financial decisions in life. Here are some basic information that you will need to consider before buying a house.

Firstly, find out if you are ready to buy a house.

ü  Make sure you have a steady reliable source of income from past two years.

ü  Make sure you will not be moving out to another city soon for any reason.

ü  Have a clear financial picture - make sure your income exceeds other outstanding debts (like credit cards, car payment) and other expenses so you will have enough money to make the monthly mortgage payment.

ü  Make sure you have enough funds to for down payment (3.5% to 20% of the sales price), and must have enough funds for closing cost i.e. 3% to 4% of sales price.

ü  Make sure you have checked your credit report at least few months prior to purchasing a house. Which will give you enough time to increase the score if you have to correct anything in your credit report. The better the score, the better your rates.  

Secondly, familiarize yourself with the mortgage process. The Loan given by the bank/lender to buy the property after the approval is called mortgage. Web is probably the best place to find out about the about mortgage process. However, I would recommend you to consult with a loan officer about your loan. This way you will be ready for pre-qualification procedure. Once the lender has pre-qualified you, they will issue you a pre-approval letter (The letter will be used while sending the offer).

After that, find a realtor you trust, discuss your needs, find the available houses and start your house hunt. While touring the houses keep following things in mind, they will guide you to make the right decision. 

ü  Decide the type and size of the house, like a new/old, single house, townhouse, condominium or any other based on size of your family and other factors.

ü  Look for a house of your price range based on your Loan approval and financial picture.

ü  Choosing a location is very important. Know the ins and outs of the area where you are thinking to make your purchase. Find the commute time to your job or business.

ü  Select a community which will be perfect for your daily life: consider things like school, public transportation, shopping facilities, and highways.

ü  Also consider the inside the house like structure, features, design, and age of house, conditions.

Once you like the house your realtor will help you to write the offer and to negotiate the price. You will only get the house if your offer is accepted by the seller, thereby turning the offer into a legal contract. Finally, the lender will approve your mortgage and you will go through the closing/settlement process.

A Few things to remember:

ü  Always get discloses about the house from seller. (HOA Disclosures/ CA Disclosures)

ü  Have the house professionally inspected, (Structural, plumbing, electric, Radon)

ü  Check your documents wisely before you sign. (Addendum, Contracts, Inspection Reports )

For new constructions you will probably deal with the builder through your realtor. If you like the location and the design, you need to put 5%-10% down and sign the contract. Usually the loan will be approved through their preferred lender, who at often times will help you with certain portions of your closing costs. The house will be delivered to you as per their construction schedule.

(Next post - Credit scores, mortgage details )