As Generation X-ers move into middle age, we are seeing fewer of them as first-time homebuyers. Now we see Millennials looking to become homeowners. What can be done to make their lives a little easier?
What may seem common knowledge to you may not be to someone who is living in a fast paced digital world. Below are 10 simple steps that potential homebuyers should know before they start their home buying process.
Know Your Budget
What may seem simple actually isn’t. While interest rates are still relatively low, they still fluctuate. Factor in variable down payments, and possible mortgage insurance premiums, and what a buyer thinks they can spend may not be the case. Before embarking on a house hunt, use simple tools to reverse engineer what you want your monthly payment to be. Simply search for Mortage Calculator, or better yet talk to a mortgage broker...
Roughly 60 percent of homebuyers rely on some sort of financing. Most first-time homebuyers fall in this segment. Make sure proper due diligence is done. Research and good old-fashioned phone calling are a must. Also, be sure to contact your existing bank. Some banks offer incentives for existing customers. When looking at a mortgage of 30 years, saving 1/10 of a percent can save thousands over the life of a loan.
Get Your Paperwork Ready
This may have already been taken care of during preliminary conversations with a mortgage broker, but if not, get everything ready. If possible, get everything in digital format: previous 2+ years of tax returns, pay stubs and bank statements.
Check for Available First-Time Homebuyer Programs
Simply doing a web search for first-time homebuyer programs will get you plenty of results, but be sure to look at the U.S. Department of Housing and Urban Development website. They have a special section dedicated to local programs you can review by clicking here.
New Construction vs Resale Homes
Everyone loves a new home, but there are pros and cons to consider. Make sure the buyers know the deposit to build is NOT the deposit needed for their mortgage.
See as Many Homes as Possible
While looking at homes, make a list of the "must-haves" and then the wish list. Something as simple as this can really help identify the proper home.
Location, Location, Location. Make sure the location selected meets the current and future needs of the homebuyer. Are children in the plans? Is the property in the best school district? Use resources such as Cruvita.com to identify specifics on the property being reviewed. Remember agents can't steer clients towards a particular neighborhood or even a school district. This is when having sites like Cruvita can make a big difference.
After the Offer is Made
After the prospective buyer makes an offer, what happens next? It’s NOT straight to the closing table. A home inspection needs to happen. This is not to be confused with the home appraisal which will be ordered by the lending institution. Keep in mind if the buyer is getting an FHA Loan a second appraisal may be ordered. Also, after the inspection, what if items need to be fixed? Will there be concessions? This is when having a seasoned real estate agent/broker can make all the difference.
The Closing Process
Has the loan been approved by underwriting? Have the funds been cleared? How do the funds need to be paid by the buyer? Knowing in advance all of these things can make the day of closing a lot less stressful.
First, find the right moving company. Second, make sure all utilities are set up and ready to go. In some instances a copy of the HUD Statement may be needed from the closing. Make sure digital copies are readily available.
When it comes time to find the right home, be sure to use Cruvita.com. And if needed, contact one of the Cruvita Home Sales Experts to help.