Homeownership is one of the great steps in life. It’s a significant financial and logistical commitment, but it brings with it the security and the privilege to put your own stamp in a place.
Whether you’re considering taking the leap or just landed your dream home, here are our thoughts on how to become a homeowner, the benefits of homeownership, as well as some responsibilities to consider.
It takes a lot of time and effort when you are planning to buy a home. Because acquiring a home is, for many of us, one of the most important goals in our lives.
Having your own home provides security for our loved ones and constitutes the heritage for our families.
That’s why we must handle with special care all the steps and conditions when buying a house.
How to start?
1. You need to know what type of home do you want
It’s impossible to do an efficient search if you don’t know what you want. For this reason, the first step in buying or building a house is knowing exactly what your needs are.
Make a list of the priorities in your family and based on these, define what would be the ideal house for you.
2. Take into account your financial situation and how much you can spend
In most cases, lenders will advise people looking to buy a property that the price does not exceed their total earnings by a large margin.
However, it is essential to make this decision depending on your financial position.
3. Keep in mind the homeownership tax deductions
Most of the time, people don’t request this type of deduction due to simple ignorance or difficulty in understanding the current laws that support them.
In some cases, those deductions or exemptions can mean great refunds.
There are four areas to consider: points, prepaid interest, property tax apportionment, and tax credits.
Tax deductions for homeowners can add up to thousands of dollars but are worth claiming only if all of your itemized deductions exceed the standard IRS deduction.
4. Get pre-qualified and pre-approved for your mortgage
Before looking for a home, you need to know how much you can spend on it. You can achieve this by having prequalification for the mortgage.
The requirements for prequalification are simple. You just need to provide your mortgage bank with some financial information. This information is represented in your total income and the number of investments and savings that you have accumulated.
That’s why the lender’s job will be to assess your credibility and ability to pay and will recommend the amount that can be loaned to you.
This information is important in determining which homes are within your possibilities at the moment.
Then, you can get pre-approved for the credit. This means that you will have to present your financial documents to the lender for him or her to review them and verify your financial status and solvency. Documents presented to the lender include account statements, pay stubs, and W-2 forms.
5. Find the right Real Estate Agent
Before buying a home, make sure you find a reliable real estate agent, as he or she will provide you with information about neighborhoods and homes, information that is not available to the public.
A real estate agent could be very supportive, as they have negotiation skills, knowledge of the buying process, and the areas in which you want to buy.
Besides, using an agent will be much cheaper for you since the seller is the one who pays for their services.
6. Contract a mortgage banker to select your loan
Lenders have usually very competitive loan rates and excellent customer service. That’s why although you will have many questions when purchasing a home, you should seek the services of the most experienced mortgage bankers.
People have different priorities when buying a home.
Some may be interested in keeping their monthly payments lower, and others want to ensure that their monthly payments don’t increase.
7. Value The Home
In most cases, the lender is responsible for coordinating the visit of an appraiser who will be able to determine the value of the property.
The appraiser’s job is to estimate a fair price for the home, as it should not be associated with the lender or with you.
8. Coordinate the paperwork
One of the bad things about getting a house is that buying a home always involves a lot of paperwork.
The lender should coordinate with the title company to handle all the paperwork necessary to determine the correct owner of the property.
9.Close the sale
The documents are signed once the sale is closed. And when it’s done, it will take some days for the lender to finance your loan.
But after that, you are ready to try your new house.
Advantages of Homeownership
- You can get a return on your investment through mortgages.
- You can rent the house, or just some rooms to have a fixed monthly income.
- You can have greater stability for yourself or your family.
- You can adapt the house to your tastes and needs.
- You can improve your credit score by being constant and responsible with each payment.
Disadvantages of Homeownership
- You will have an increase in expenses between utilities, home repairs, and maintenance, as well as property taxes and homeowner’s insurance, costs that tend to increase over time.
- If you have assumed expenses that exceed your income and you do not pay the mortgage on time; the lender could foreclose, causing you to lose the title to the home.
- When you are a homeowner and you want to move, the process can be slower than you think, as selling your home could take time.
We wish you the best of luck buying your new home and hope that this information has been useful for it.