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Buying Your First Home: Here’s the Lingo You’ll Need to Know

1
If you’ve got your heart set on buying your first home, you need to do all the necessary math. Yes, it’s an exciting process, but you really shouldn’t rush into it. It involves a lot of preparation, calculations, and savings. To make sure you’re familiar with all the steps, here’s some solid advice that will help make the whole thing run smoothly.
Long-term plans
Be objective when assessing your present and future plans. You need to know how much you can invest, and the purchase itself is not the only expense you’ll encounter. After buying
SelfishMother.com
2
a home, at least several years need to go by until you can make some profit selling it. If you’re planning to relocate soon after, this might not be the right time for you.
Finances
One of the main perks of being a homeowner is that you’ll finally stop paying rent, and your mortgage payment will probably be smaller than the amount you set aside for your landlord every month. However, bear in mind that there’s more to it. Apart from the down payment and the monthly mortgage rate, you’ll need money for closing and moving costs, and don’t forget
SelfishMother.com
3
about the emergency fund. All things considered, you should always expect the unexpected and be financially prepared.
Predicting your financial future
When it comes to loans, getting an estimate of your financial potential first is a wise strategic move. Once you find out what your budget allows, it will be much easier to narrow down your choice of homes. A pre-qualification is a short and informal process you can do over the phone. You don’t even have to use the same bank to get a loan; its sole purpose is to give you a better idea of what you can
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4
afford. However, whoever your lender turns out to be, they will be very much interested in your financial past and if you pay your bills on time, overextend your credit or have a lot of debt.

A pre-approval is in no way obligatory, nor will it require you to take out a loan, but it will help you better understand how much you can actually borrow. This service is completely free, and the offer is usually valid for 3 to 6 months. If necessary, you can always extend it by talking to your lender or a home loan specialist. It will definitely make you feel

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more at ease while attending auctions since you’ll know exactly how much you can and cannot spend.
Choosing your home
The first thing you should consider is of course – location. You can modify your home, but you can’t change your neighborhood, so try to choose one that will fit your lifestyle best. Also, you should try and visualize what your home will look like after you move in. You may be looking at some outdated furniture and ugly carpeting now, but all that will go away with the previous owner and you’ll be free to add that personal touch.
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Why not bring a contractor with you for closer inspection? Their expertise will surely come in handy and you’ll be able to see the potential you otherwise might have missed.
Finding a lender
There’s more to finding an appropriate lender than just getting a good interest rate. What you’ll need is a professional who will guide you through the whole process. Besides getting your credit score in shape and attaining a pre-approval, you should compare rates from several mortgage lenders in order to find the best deal. The upside is that it doesn’t
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7
require much legwork since you can search for best mortgage rates online. And – don’t forget to read the fine print.
Closing the loan
At the closing, you’ll finally get to the long-awaited point of signing the documents that will make you a homeowner. Usually, your loan officer, the seller, your attorney, and the real estate agent can be seen at the closing table. You’ll need to provide the necessary documentation and take care of the closing costs. A closing statement, which you should receive at least three days before the closing date, will
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tell you how much money you need to bring to the closing.

 

 

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- 23 Apr 19

If you’ve got your heart set on buying your first home, you need to do all the necessary math. Yes, it’s an exciting process, but you really shouldn’t rush into it. It involves a lot of preparation, calculations, and savings. To make sure you’re familiar with all the steps, here’s some solid advice that will help make the whole thing run smoothly.

Long-term plans

Be objective when assessing your present and future plans. You need to know how much you can invest, and the purchase itself is not the only expense you’ll encounter. After buying a home, at least several years need to go by until you can make some profit selling it. If you’re planning to relocate soon after, this might not be the right time for you.

Finances

One of the main perks of being a homeowner is that you’ll finally stop paying rent, and your mortgage payment will probably be smaller than the amount you set aside for your landlord every month. However, bear in mind that there’s more to it. Apart from the down payment and the monthly mortgage rate, you’ll need money for closing and moving costs, and don’t forget about the emergency fund. All things considered, you should always expect the unexpected and be financially prepared.

Predicting your financial future

When it comes to loans, getting an estimate of your financial potential first is a wise strategic move. Once you find out what your budget allows, it will be much easier to narrow down your choice of homes. A pre-qualification is a short and informal process you can do over the phone. You don’t even have to use the same bank to get a loan; its sole purpose is to give you a better idea of what you can afford. However, whoever your lender turns out to be, they will be very much interested in your financial past and if you pay your bills on time, overextend your credit or have a lot of debt.

A pre-approval is in no way obligatory, nor will it require you to take out a loan, but it will help you better understand how much you can actually borrow. This service is completely free, and the offer is usually valid for 3 to 6 months. If necessary, you can always extend it by talking to your lender or a home loan specialist. It will definitely make you feel more at ease while attending auctions since you’ll know exactly how much you can and cannot spend.

Choosing your home

The first thing you should consider is of course – location. You can modify your home, but you can’t change your neighborhood, so try to choose one that will fit your lifestyle best. Also, you should try and visualize what your home will look like after you move in. You may be looking at some outdated furniture and ugly carpeting now, but all that will go away with the previous owner and you’ll be free to add that personal touch. Why not bring a contractor with you for closer inspection? Their expertise will surely come in handy and you’ll be able to see the potential you otherwise might have missed.

Finding a lender

There’s more to finding an appropriate lender than just getting a good interest rate. What you’ll need is a professional who will guide you through the whole process. Besides getting your credit score in shape and attaining a pre-approval, you should compare rates from several mortgage lenders in order to find the best deal. The upside is that it doesn’t require much legwork since you can search for best mortgage rates online. And – don’t forget to read the fine print.

Closing the loan

At the closing, you’ll finally get to the long-awaited point of signing the documents that will make you a homeowner. Usually, your loan officer, the seller, your attorney, and the real estate agent can be seen at the closing table. You’ll need to provide the necessary documentation and take care of the closing costs. A closing statement, which you should receive at least three days before the closing date, will tell you how much money you need to bring to the closing.

 

 

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