Summer is finally here which means it’s time for cook outs with family and friends and enjoying the sunshine! What could possibly make this summer more memorable you ask?  How about buying a new home? 

I know what you are thinking and I’m here to tell you the home buying process doesn’t have to be the big elephant in the room, with some basic knowledge upfront the home buying process can be as gentle as a nice summer breeze.

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Step 1:  Know your credit score and how much you can afford.

 

  • You are eligible to receive one free credit report a year, visit http://www.annualcreditreport.com  and take a look to make sure everything appears to be correct.
  • Take a look at your current living expenses compared to your household income.  Day Air’s website offers free calculators to help you figure out what you can afford with your budget.
  • How much do you have available for down payment and closings costs?  There are a wide variety of loan products that require as little as 3.5% down payment.
  • If this is your first home take into consideration that there will be extra costs involved that you may not have at an apartment, such as Real Estate taxes, homeowners insurance or home repairs.

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Step 2:  Find a Lender and Real Estate agent that’s right for you.

 

  • Get recommendations from your friends and family, word of mouth referrals are often the easiest way to go.
  • Stop by your credit union, we can offer the same loan products as any other lender.
  • Day Air offers the Home Advantage Program which helps by pairing home buyers with experienced Real Estate Agents.  The program also gives our members access to research extensive information on homes in their area as well as earn a rebate.
  • Once you have found a lender make sure you get a pre-approval letter to take with you when you shop for homes.  Almost all Real Estate Agents require proof of pre-approval before taking homebuyers to open houses.  Also this allows you to make an immediate offer on a home that you’ve fallen in love with.

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Step 3:  Find the right home

 

  • Make a list of things you’ll need to have in a house. Ask yourself, how many bedrooms and bathrooms will you’ll need?  How big do you want the kitchen to be?  Do you need a big yard for your kids and/or pets to play in?
  • Once you’ve made a list of the must haves, don’t forget to think about the kind of neighborhood you want, types of schools, length of your commute to work and the convenience of local shopping.
  • You will also want to look at the rate of appreciation in the area you are looking; some areas are more prone to increase in value than other areas.

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Step 4:  Make an Offer on your dream home

 

  • Most sellers price their homes a bit high, your Realtor will help you in finding a good starting price.  Your agent is able to pull a list of how much comparable homes have sold for in the area to give you a better idea of a starting point as well.
  • Once you make an offer the sellers can either accept or counter-offer, sometimes there are 3-4 counter-offers from both sides before a final price is established so don’t get discouraged.
  • Review the Residential Property Disclosure filled out by the seller, this form will tell you if there have been any past problems with the home.  For example, the seller might have marked that there was a leak in the basement within the past year; you will want to ensure the seller has taken the proper steps to fix the issue before committing to buy the home.
  • Always take a second look before putting in a final offer just to ensure the home has everything you are looking for and to ensure you didn’t miss any issues the first time around.
  • Always ask the seller to pay your closing costs, this will help to free up some of your funds for updates or appliances when moving into your new home.  Most sellers are more than willing to pay the maximum allowable closing costs; depending on the loan program you are approved for the seller could potential pay up to 6% of the purchase price in closing costs.
  • It is always recommended to get a whole house inspection to ensure there aren’t any major issues that aren’t noticeable.  A whole house inspection isn’t required for your home loan but is beneficial to the homebuyer.

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Step 5:  Get the right mortgage for your situation

 

  • Once your offer is accepted talk with your loan officer about what loan product is right for you.
  • Are you planning on staying in the home long term?  If the answer is yes than a fixed rate product is probably the more reasonable choice.
  • Are you planning on staying in the home under 3 years?  Then maybe an ARM product is more suitable of your situation.  An ARM product has a fixed interest rate for a certain number of years, such as 3 or 5 years, than every year after can increase depending on the market rate at the time.
  • Check out rates on the various products.

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Step 6:  Close on Your home

 

  • Make sure you have a final walk through before closing on your home, this will allow you to ensure things are still the same as the first time you saw the home.
  • The closing date will be set at a time and date that is convenient for both parties.  Your loan officer will coordinate the closing with your realtor and the title company.
  • Be sure to speak with your loan officer to ensure you understand what costs are expected from you at closing and to make sure the payment and loan terms are a good fit.
  • Be sure to read all documents before signing them, the title agent that will be closing your mortgage is there to answer any questions you may have.
  • Once all paperwork is signed the home is yours!  Be sure to store your paperwork in a secure place for easy access if needed.


The home buying process doesn’t have to be a hassle if you’re prepared and you know what to do and when to do it. 
Choose an experienced lender (Day Air is always here for your financial needs!) and a friendly, knowledgeable real estate agent; they are the key to helping you have a smooth home buying experience.  When you’re ready, just contact us and we can help you get into your dream home!

Michelle Pyle | Mortgage Manager