Purchasing Your First Home

For many of us, buying a house will be the biggest purchase of our lives. It’s an exciting and stressful decision at the same time. Before rushing in to find the home of your dreams, there are a few basics you should understand.

Before the house hunt begins.

houseBefore you buy a house, check your credit reports from each of the three credit reporting agencies and resolve any issues you find. Decide on a price based on your income, other loans or debts, and how long you plan to live in the house. A mortgage calculator or real estate broker can help you determine what you can afford. Another way to stay within your budget is to get pre-qualified for a loan, meaning you apply for a mortgage before you start house-hunting.

Turn to the experts.

Once you begin looking at houses, a real estate agent can be very useful in identifying potential houses and walking you through the home buying process. Before you sign an offer on any house, hire a home inspector to point out any problems with the construction or maintenance of the house. These problems are the seller’s responsibility to fix. Buying a house is a long process and involves some large decisions. Talk to family or friends who have home buying experience for assistance and advice.

Real Estate Agents, Brokers and Realtors

A real estate agent helps people buy and sell houses. They work for real estate brokers, who manage real estate offices. When you buy a house, the agent is usually the person who meets with you to discuss what type of house you want and who attends house showings with you. While the broker can perform the duties performed by an agent, they are licensed to manage their own business as well as help rent or manage properties. A REALTOR© is a member of the National Association of REALTOR©, so he or she must follow the NAR Code of Ethics. Any person who works in the real estate industry can become a REALTOR©, including brokers, salespeople, appraisers, and property managers.

Mortgages

A mortgage is a loan used to purchase real estate. There are two main types of mortgages: fixed-rate and adjustable-rate. A mortgage calculator or real estate broker can help you figure out what you can afford, and the lender can help you decide whether a fixed- or adjustable-rate mortgage is best for you. Check with the lender to see what documents you’ll need to bring with you when you apply for the mortgage.

Homeowner’s Insurance

If you have a mortgage, a paid homeowner’s insurance policy (or a receipt for one) will be required when you close on the house. Work with an insurance broker to determine which of several levels of coverage is right for you. The most basic insurance level covers fire and theft, while some of the highest levels cover everything except earthquakes, floods, wars, and nuclear accidents. Before choosing an insurance company or policy, research the price, claims service, and financial stability of the company. Once you’ve decided on a company and a coverage level, your insurance broker will assist you with the actual purchase process.

 

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