Buying your first home is a major investment. But it doesn’t have to be a major headache. These ten steps to purchasing a home can help lessen the stress of your first home buying experience.
What kind of mortgage loan best suits your needs? For instance, a fixed rate mortgage is locked in for the life of the loan. Adjustable rate mortgage payments can fluctuate, and are less popular when mortgage rates are low. Multiple mortgage varieties are available - from loans specifically designed for entry level buyers to loans for veterans and construction loans. Learn more about the types of mortgage loans available.
The mortgage you choose impacts how much home you can buy and whether you have to pay Private Mortgage Insurance (PMI), which is normally required when the down payment is less than 20%. An Old National mortgage loan specialist can help you understand your options and select an approach that fits your lifestyle and budget.
As a general rule, your mortgage payment, including taxes, insurance and association dues, should not exceed 28% of your gross monthly income, and your total monthly debt payments should not exceed 36% of your gross monthly income. However, there are many factors that impact these percentages, and your best approach is to work with a mortgage specialist to determine how much you can afford. Contact an Old National mortgage loan specialist in your area. Our online mortgage calculators can help too.
Mortgage lenders can pre-qualify you for a home loan before you start looking at homes. Our lenders will help you determine what type of home loans best suit your situation and will describe the features and benefits associated with each mortgage option. The process is quick and easy with an answer in minutes. Once you are pre-qualified for a mortgage:
Do you prefer a two-story or a ranch? Can you make do without a garage? And if you're shopping as a couple, are you really in agreement? It’s rare to find a house that has everything you want, so a smart approach is to make a list of must-haves and & like-to-haves.
Follow the same basic process as Step Four. How important is being near a good school? What about commute time? Do you mind a bustling neighborhood or do you prefer privacy? Again, it's difficult to find everything you desire, so it's crucial to prioritize.
Now that you've been pre-qualified and have defined your ideal home and neighborhood, you're ready to hire a real estate professional. If possible, have your agent sign a buyer’s agent contract. Without such a contract, the agent technically represents the seller.
How do you find a good real estate agent? Ask around. Also consider the reputation and resources of each real estate company in your market. How aggressively do they advertise listings? How many clients does each agent typically represent at one time?
When you’re touring prospective homes, don’t get sidetracked by paint color, wallpaper patterns, decorations and furniture. Instead, focus on things that cannot be easily or inexpensively changed, like:
No matter how much you love a house, don’t make an offer without first paying for a professional home inspection. A licensed home inspector is trained to look for the things you might miss – like faulty wiring or building code violations. An inspection might cost you several hundred dollars, but you could be avoiding a much more costly mistake.
A good agent can help you understand conditions in your market (are homes selling fast or slowly) and help you determine an appropriate dollar figure for your initial offer. In general, the seller expects to receive an offer less than the asking price. Such negotiations are a healthy part of the buying process.
Once your offer is accepted, it’s time to schedule a closing date. Here are a few things to consider: