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10 Simple Steps to Buying a Home in Georgia
Hello everyone! Today we’re going to look at 10 steps to buying a home.
Do Your Research:
What's the very first thing you do when you're interested in buying a new product or learning about a new topic? You're going online and doing your research, at least I hope you are! When moving to a new area, look up prices between different neighborhoods, compare the taxes between counties, especially if you have a city that bleeds into two different counties. Research crime statistics and if it's something that's important to you, make sure you're researching schools so you can wind up in the district that you're looking for. I recommend too, not only just walking around the city and seeing its walkability scores, how close are restaurants, how easily accessible it is, but make sure you drive and drive at different times of the day so you can get an idea of traffic and congestion. And take into consideration what quality of life is the city offers.
Decide What YouCan Afford:
Generally, your mortgage is made up of four components, principle, interest, taxes, and insurance. As a rule of thumb, you don't want your housing expenses to exceed about 28% of your monthly income. Remember, maintenance and cost of a house can eat up a lot of your income leaving you house poor. So remember, just because you get approved for a $3,000 mortgage doesn't mean you can make the payments. You have to consider costs beyond the mortgage. Maintenance, utilities, homeowners association. Maybe you want new furniture and decor for the home. This is going to be the single largest investment that you probably ever make. So make sure that you're taking the time to do the math. Remember, lenders can help you get a mortgage, but only you can decide if you can afford it.
Get Pre Approved / Pre Qualified:
It's really important that you understand the fundamental differences between pre-qualification and pre-approval. I hear the terms used so interchangeably, but they are two different steps in the process of getting a mortgage. Pre-qualification is just that. You're simply qualifying for a mortgage. You will provide your lender with basic information so they can evaluate your overall financial situation and give you an idea of how large of a loan that you can actually afford and what price of houses that you should be looking at. Pre-approval is the second step. That's when the consumer's data that they've submitted has actually been verified and now they're willing to grant a conditional commitment for a mortgage. In this hyper-competitive buyers market, make sure that you position yourself as strategically as possible when you're making an offer. What does that mean? Get prequalified, get pre-approved for credit. If you want to take that second step and get pre-approved for credit, submit the documents required by your lender and take that next step. It's always smart to get that done at the beginning of the process. Then when you make an offer, it comes in much stronger than some of the others because you've already got your financial commitment.
Find the Right Agent:
We have a saying in real estate, 20% of the agents are doing 80% of the business. Your job is to find that one out of 20% and put them to work for you. The best real estate agent will be an experienced professional who listens to your concerns and can guide you through the home buying process. They should act as a trusted partner and be able to give you valuable information about homes and neighborhoods that are not readily available to the public. So their negotiating skills, their familiarity with your local area and they're also familiar with the buying process can prove to be invaluable for a buyer. And the best part is we don't cost you anything. We are compensated from the commission paid by the seller of the home.
Find Your Home & Make an Offer:
This has to be everyone’s favorite part of the entire process, we get to go look at homes! By now, you and your agent should have decided what you want and need in a home, what area(s) you would like to be in and in what price range you should be looking. Your agent can start setting up tours and putting you on an automated search so that you instantly receive new listings. Once you’ve found the home you love, you will work with your agent to craft an offer, based on local comparable sales, and submit it to the listing agent. When your offer has been accepted and acknowledged, you are officially under contract.
All right! We made it to the inspection day. Typically, offers are contingent upon an inspection to be able to check for any structural damage or anything that needs to be fixed or repaired on the home. You and your agent should coordinate with the listing agent to set up the home inspection within a few days of the accepted offer. The inspection contingency protects you as a buyer because it gives you an opportunity to renegotiate or withdraw your offer without penalty if the inspector finds any structural damage to the property. You will have an opportunity to ask the seller to make any repairs prior to the sale. And prior to closing, you will conduct a walk-through inspection of the property to make sure that all requested repairs have been completed.
Find the Right Loan:
Once your offer is accepted, your lender will request all necessary financial documents needed for your loan program, put everything together and send it to a processor. The processor will submit your file to underwriting to verify all information and to make sure that everything you’ve submitted is within the guidelines of the loan program that you are taking out. And then from there, if you and the house both meet the guidelines, then you're getting approved for funding of the loan. In the final stages of this process, the closing department is working on your documents, also known as your loan docs, and preparing them for the closing attorney. Prior to the closing ceremony, you will have an opportunity to review all the details of your loan including your mortgage amount, the monthly payment, your interest rate, and also any fees or closing costs.
In a nutshell, an appraisal is an unbiased opinion of a home's fair market value. Once any due diligence period has expired, the lender is going to order an appraisal. Normally, this is done during the loan process so there is an objective opinion about the value of the home and so the lender can verify that the amount being borrowed is an appropriate amount. Appraisals take into consideration recent sales, condition of your home, and location of the home. If for any reason it doesn't appraise, the lender can actually refuse to grant the loan. So this is why it's so important to make sure as a buyer, that you have a contingency in the contract that stipulates if the home doesn't appraise, you can withdraw your offer or renegotiate the offer without penalty.
Finalize Paperwork & Prepare for Closing:
There's no doubt that a tremendous amount of paperwork is involved in buying a house. Thankfully, your lender will coordinate with the closing attorney to handle everything. Your closing attorney will also verify that the seller of the property is the rightful seller of the home that you are buying.
When notified by the lender, the closing attorney will coordinate with all parties and their agents to schedule the closing ceremony. Just be sure, if you can't be there, let your closing attorney know ahead of time so that they can make other arrangements. As discussed before, three days prior to closing, the buyer is going to receive a closing disclosure. This disclosure is going to outline all the terms of your loan, all your closing costs, and then any funds that you need to bring to the closing. Make sure you review this document carefully. I recommend going over the form with your lender and make sure that you ask any questions of your lender prior to the closing. This is also a good time for the buyer to wire any funds needed for the closing to the attorney. The closing ceremony itself is usually an hour or less and you need to make sure that you bring your driver's license or a state-issued ID to the closing table. It's also a good idea to bring a check just in case there are any minor discrepancies in the closing disclosure form.
Congratulations, you are now a homeowner!
Meet Misty Harris - a U.S Army Veteran and licensed professional REALTOR with JP & Associates Realtors Metro Atlanta. Misty has always been passionate about real estate. It began with her admiration ....