Helpful Mortgage And Real Estate Advice

The Process of Buying a Home

By on May 21, 2014 in Home Buying Advice

Process of Buying a Home

Purchasing a home for anyone, whether it be a first-time homebuyer or second home investor can be a long and stressful experience. There are several steps to take and many things to consider before jumping in with an offer to purchase.

Every home buying experience is different and may have different requirements involved. You may also find that you need the guidance of a realtor to complete this task. So the search for one should begin as soon as possible.

Important Steps to Consider When Purchasing a Home

With the right checklist of key factors to consider during the home buying process you can definitely relax a little and not have to worry too much about what happens next, or what is asked of you.

1) Make sure that you have reviewed your current financial obligations and be aware of the status of your credit score/ history as this may determine whether you are pre-qualified for a mortgage.

2) Explore and find your ideal neighborhood that meets your standards.

3) Hunt down your home.

4) Create a list of ideal homes, surfing the web is quite convenient for many homebuyers.

5) Search for a realtor to represent you.

6) With a budget in mind and considering your current financial circumstances, make a reasonable offer.

7) Try and negotiate for the best price for you.

8) Get an appraised value in the home.

9) Sign all final documents to claim your new home.

10) Close on the deal and grab your key.

Common Real Estate Terms

Along with the following steps mentioned in this article, there are plenty more to it than just a few steps. There are several mortgage terms to get familiar with if you truly want a full understanding of the whole process of financing a home. Here are a few terms to get familiar with that can help you understand the real estate lingo.

Due-Diligence – The amount of time it takes to perform certain actions, this information is explained in a contract and agreed between the buyer and the seller in regards to the process of purchase, approval, or an appraisal.

Escrow – The word is escrow can be used in several ways. It is actually a third party that is responsible for holding the money to finance or the trust to the property until the transaction comes to a close. For completed transactions, you will often hear the phrase “closing escrow”. An escrow is also referred to as an impound account that is handled by a third party for annual property taxes, including some insurance payments that are taken out on a monthly basis.

Contingency – Something that is required in a mortgage approval, such as more documents involved before a final decision is made.

Earnest Money – The money held by the escrow for the buyer to be used as down payment to purchase a home.

Deed of Trust – The title to the property for the new homeowner. A deed of trust is documented proof that the home belongs to a certain person. In a deed of trust you can also look at it as a transfer of financial interest of a property from one party to another for a secured loan to be held. The parties are referred to as the beneficiary and the trustor. The beneficiary is the party that lends the money, whereas the trustor is the one who is entitled to the money. This particular document is put together and usually recorded by a county recorder of the property’s location.

Equity – A term in relation to the difference between the loan amount and the actual property value based on the market.

Acceptance – When the seller accepts and agrees in the contract discussed between both parties.

Home buying certainly is not an easy walk in the park, but it doesn’t have to be a stressful walk either. Making sure that you are up-to-date in your current financial obligations and keeping a good credit health would do you just fine. Don’t forget your new home buying checklist!

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About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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