You made an appealing offer for your dream house and it was accepted! Well, congratulations, you are one-step closer to your home. Once you offer is accepted, you are past the first hurdle but there are a few more steps that you need to complete.
Step I: Start with a loan application. For homebuyers who are not pre-approved, surveying through the market is an excellent option. Consult at least three lenders and find out the amount of loan you are eligible for. Several factors come into play such as interest rate, lender fee, processing charges, and net annual percentage rate.
Step II: After applying for a loan, you have to conduct home appraisal and inspection. Home appraisal will give you an exact idea of the current value of the house and the bank will lend the same amount for purchase. In case the seller has a higher asking price, you need to negotiate it further or put in extra money to cover the balance.
Home inspection is an important part of the purchase process. A home inspector would check the house for any structural damages and prepare an estimate of the repairs. It is best to conduct a pest inspection and radon inspection before purchasing the house.
Step III: Real estate transactions involve closing costs and additional expenses. You need to accumulate your funds and submit a confirmation to your lender.
Step IV: You need a homeowners insurance to complete the transaction and it is likely to cost you around $700 to $1,000. It is a mandatory requirement from all the major lenders as it ensures the safety of their investment.
Step V: In this step, you have to undergo a final home inspection walk-through. According to industry experts, you should hire a home inspector for this walk-through. Make sure to check the house thoroughly and list down any additional damages. Anything left unnoticed would be your concern after the closing of the transaction.
Step VI: The final step of home buying involves signing the closing contract and getting the ownership of your new house. Your real estate agent, mortgage broker, seller, and seller’s agent would be present at the event.