Buying a house for the first time is more than a dream come true. After all, it is a celebratory moment to own a dream haven to start a new life. That said, home buyers must know practical steps to buy a house for the first time. The real estate market is huge, and buying a house is a big financial decision in anyone’s life.
Here’s where it is indispensable to know the dos and don’ts of buying a home. This article shines a light on tips for home buyers to make their home purchase less daunting.
Steps of Buying a Home
As you move below, you will take a closer look at the steps to buy a house for the first time. We have covered end to end from how much a down payment you should make for a home loan to the document list required for a home loan.
In general, the home loan document list is as below:
- Home loan application form duly-filled
- Salary/income proof
- Pay slips for the last quarter/half-year
- Bank statements
- Passport photographs
- Credit score
- Government issued identity proof
- Tax returns
- Employment certificate
An important reminder here is:
this step-by-step guide that shares tips for home buyers is comprehensive coverage that is not specific to state/country rules. Always consult your tax consultant, real estate agent, and bank representatives to receive a custom home buyers guide in your budget.
Tip #1: Start saving (a lot!)
Whether you dream of a row house or a villa of your own, an apartment or an individual house with a small garden, one thing in common: real estate is a costly affair. Many determinants play their role in the price factor of land and house, your dream house doesn’t come that easy.
Despite the fluctuations, many first-time home buyers agree that purchasing a home is indeed a big financial investment. Hence, keep some income aside for your dream home every month without compromise. These savings come in handy when you are ready to make a down payment when you find the home that you love the most.
Tip #2: Do your research
Keep an eye on classifieds and real estate portals. List all those in your chosen location and budget. Making inquiries into such listed options gives you a clear picture of the prices, brokerage, and other details of property negotiation.
Doing your research also connects you with your different real estate agents and connections that will be useful in your house hunt.
Tip #3: Care for your credit score
Your credit score is a summary of your financial history. It provides the gist of how timely your repayments were for educational loans, credit cards, etc.
Home buyers need to maintain their credit score in optimal health failing which the chances of house loan approvals can become narrower.
To know what is a good credit score for your local state/country rules, connect with a personal finance consultant.
Tip #4: Pre-approval
Here is a crucial stage in the steps of buying a home: checking for pre-approval.
What is pre-approval?
Pre-approval is a process where your potential to be a home buyer is approved by a bank/lending organization.
For instance, if you wish to buy a home in Florida, you must connect with your potential lender and request them your eligibility for a home loan. They will scrutinize your financial status, suggest the best budget range, the down payment you must make, and the possible home loan you are eligible for.
The pre-approval stage is an insightful one from steps to buying a house for the first time as it helps you understand your win rate for a home loan.
Tip #5: Choose a proven real estate agent
Purchasing a home for the first time is undoubtedly daunting for all good reasons. From starting your search for projects you can trust to dealing with legal aspects and the registration process, every step can be cumbersome.
A piece of good news here is: with a proven real estate agent on your side, your life becomes simple. Their experience and expert suggestions will come in handy in accelerating the home-buying process. You can focus on the real things like arranging for money or planning for after-purchase while the real estate experts handle the other aspects.
It is vital to find good real estate for all this to happen. Check your local Realtors associations, utilize social media groups, and check newspaper classifieds, online reviews, and directory listings to find a real estate agent in your locality.
Tip #6: Participate in real estate events and exhibitions
Another great place to find reliable builders is real estate events which is why we added it here on steps to buying a house for the first time.
Many a time, such events are sponsored by well-known builders and financial institutions that offer housing loans. Bonus, real estate agents, and potential home buyers gather at such events under one roof.
In other words, the exposure you gain in the real estate arena through such events is huge. At the end of the day, you will have more home-buying options than you think, better home financing options than you were aware of, and a wider home-buyer network than you could imagine.
Tip #7: Jot down your final list
Now that you have plenty of real estate connections and ready-to-buy home options, it’s time to jot down your final thoughts and list. At this step, we have only a couple left in the steps to buying a house for the first time.
Ask yourself these questions and discuss them with family and friends to come to a solid conclusion:
- What is the home size you are looking for?
Do you stay single, with your family, kids, wife, newly married, or moving-in family with kids – consider all such factors before you settle on the home size and type.
- How comfortable are you with the home location?
Your flexibility with commuting to an office and the availability of hospitals, schools, shops, and transport play a vital role in enjoying a comfortable living after your purchase. Cutting down on commute is one of the ways to save the environment from your home.
- How comfortable is your housing loan type?
A housing loan is a long-term payment. It is essential to consider the repayment affordability before you make your final decision. Home loans can be joint or single based on your convenience and choice. You and your partner can opt for a joint loan where the monthly EMI will be deducted proportionately from your income.
- Are you purchasing the home for immediate living or investing purposes?
Most first-home purchases are done for immediate living. However, if you plan to rent the home, check the expected rents in the locality. It will help you assess how soon you can repay the housing loan with the rent amount.
- Is your home loan fixed or floating?
While there are types in home loans, your financial advisor should explain you in detail which is better for home loan fixed or floating.
Tip #7: Appraise your home
Appraising your home is one of the best steps to buying a house for the first time you could probably make when buying a home. A home appraiser assesses your home’s cost in the market. With their guidance, you can figure out if the hard-earned money you spend on the house is as a good investment.
Tip #8: Seal the deal
At this stage, you are filled with everything you need to know about buying a home for the first time. It’s time to impress your seller with earnest money and lock in the home deal. Now the real estate agent or your home seller would guide you with the submission and approval of the legal documents.
Once your home loan is approved and registration is complete, congrats, you are officially a homeowner!
While there are many benefits of becoming a homeowner, it is vital to understand the right way to become one. We hope this step-by-step guide with steps to buy a house for the first time helped you in simplifying your first-home purchase.