Home Buying Checklist
Owning a beautiful home is a dream many chase.
Yet, for a large number, purchasing a house is the pinnacle of financial decisions, and the path can seem overwhelming.
Treading through the intricate domain of real estate means grasping detailed financial, legal aspects, and more routine matters like property borders and potential flood threats.
Thankfully, the specialists at Mutual of Omaha are committed to helping you secure your dream residence. The real test, however, is identifying the perfect professionals. Many first-time buyers, overwhelmed by the nuances, opt to stay renters. To simplify, we’ve fashioned a roadmap to lead you to your ideal home!
Determine your budget
Homeownership is undoubtedly among life’s substantial financial undertakings. Before exploring properties, make sure the home you fancy is financially feasible.
A large number of hopeful homeowners turn to loans to fund their dream house. It’s disheartening when a mortgage application doesn’t go through. As such, evaluating your finances before house hunting becomes an essential first step.
Gather Your Down Payment
Once you’ve identified what you can comfortably afford, the next phase is deciding on the down payment.
The down payment is influenced by your selected mortgage type. Conventional mortgages usually require initial payments of 3% to 5% of the property’s sale price.
However, to avoid private mortgage insurance, a 20% down payment is recommended.
For FHA loans, a down payment of 3.5% is standard. Certain mortgage alternatives, such as the government-endorsed USDA and VA loans, allow financing the home’s total value without any initial payment.
Regardless of your down payment amount, it’s prudent to set aside extra money for closing costs and potential repair needs identified during inspection.
Get Pre-Approval from Mutual of Omaha
Prior to initiating your property search, know your financial limits. A pre-approval letter is a testament to sellers and agents of your earnest intent.
It’s vital to distinguish between pre-qualification and pre-approval. While pre-qualification provides an estimated loan amount, pre-approval offers a deeper financial review to state the exact amount available.
Find A Real Estate Agent
Partnering with a real estate expert can greatly aid your home search. They can spot newly available homes and possess extensive knowledge about the local market, providing insights that can direct you to the right home.
To find a credible real estate expert, consider recommendations from friends and family, explore online reviews, and engage in conversations with various professionals to select the one that meshes with your requirements.
Potential homeowners can be rest assured about agent fees. Often, it’s believed that the buyer pays the agent’s commission. However, typically, the seller covers both their agent’s and the buyer’s agent fees, so there’s usually no direct cost for the buyer.
Look For The Perfect Home
After establishing your budget and verifying any property adheres to your lender’s criteria, the exciting phase begins – house hunting.
Draft a list of non-negotiables for your new home. While it’s easy to get swept away by certain appealing features, keep your priorities in check. Don’t overlook potential red flags.
Share your preferences with your real estate expert. They can curate a selection of homes that fit your criteria, ensuring efficiency and saving time.
Make An Offer And Negotiate
Once you find the right place, it’s time to bid. Your property advisor will provide guidance throughout this phase.
Several elements influence your offer, including:
- The current temperature of the property market
- The listed price of the home
- The presence of competing bids
- The duration the home has been up for sale
After submitting your offer, the homeowner might accept, decline, or counter. If not accepted initially, you can reevaluate and adjust your offer. Your offer includes an earnest money deposit, usually between 1% to 3% of the property’s price, held in escrow until the homeowner’s decision.
Reconsidering and retracting your offer leads to the earnest money being handed to the seller. If everything aligns, it’s applied to the down payment and final mortgage-related expenses.
Get Final Approval On Your Mortgage
Post the seller’s acceptance of your offer, the formal mortgage application process commences.
Although you hold a pre-approval, anticipate furnishing additional documentation as the underwriting advances. Remember to liaise with Mutual of Omaha for clarity on the final financial requirements.
Schedule A Home Inspection And Appraisal
After settling on the purchase price with the seller, the next steps involve scheduling a home inspection and appraisal.
A home inspection ensures compliance with standards and evaluates vital structural aspects. The evaluation extends to systems like plumbing and electrics, providing a detailed report.
Some also opt for additional checks for radon and mold.
While home inspections are optional yet highly recommended, appraisals are mandatory to validate the home’s worth matches the loan amount.
An appraiser determines the market value, referencing local property sales and assessing the home’s overall condition.
Close On Your New Home
Congratulations! You’re nearing homeownership. Although your real estate expert and mortgage consultant manage most tasks, you have some responsibilities:
- At least three days prior to closing, your financial institution will provide you with the closing details.
- You’ll have an opportunity for a final review of the property either on or before the closing day.
- Make sure to bring either a bank-certified check or arrange a wire transfer to address your down payment and associated costs.
- Remember to have evidence of your homeowner’s insurance on hand.
- Don’t forget a valid form of identification.
Are you ready to get started?
With the home purchase guide at your fingertips, it’s time to set things in motion. Reach out to Mutual of Omaha and embark on your home-buying journey in Chicagoland!