5 Things you Need to Know When Buying Your First Home

home buying a home

Entering the Real Estate market and buying a home can be quite daunting.

It is an emotional,  stressful experience, especially if it is your first home.

Understanding the process will make it easier for you. Here are five things you will need to get started.

1.      Mortgage Lender

The first step is getting pre-approved for a mortgage.

When hunting for a mortgage it is to your advantage to approach your own bank first. Check mortgage lending rates online and then negotiate with your bank to secure the best rate. If you cannot come to an agreement with your bank, then you need to seek out a mortgage broker.

Check your local Mortgage Broker’s Association to get a recommendation. The broker can tell you how much you can spend on your purchase and the amount required for the down payment. They can also advise you of the interest rate and the rules involved in buying a home.

Mortgage brokers have many lenders to choose from when shopping for a mortgage but not all of these will stand the test of time and still be around in ten years. Therefore, a low-interest rate should not be your only criteria when selecting a lender.

Some mortgage lenders place a demanding amount of rules to follow when finalizing the paperwork. This makes the process more difficult than it needs to be.

2.     Real Estate Agent

Now that you’re armed with mortgage pre-approval it is time to get a realtor to show you the homes that meet your needs. Most realtors can show you any home that interests you.

It is imperative to choose an experienced, knowledgeable realtor that can guide you through the home buying process and any pitfalls which may be encountered. Speak with recent clients, find out how long the agent has practiced and check out their current listings.

You want a realtor who can negotiate the best price and who has your best interests in mind. If you choose a realtor who is also working for the seller, you may not get the best possible outcome.

3.      Real Property Report (RPR) or Title Insurance

Once you’ve decided on your future home, and your realtor has negotiated the best possible price and conditions you will need to decide whether to choose an RPR or go with Title Insurance. The mortgage lender will require one of these two before they will go ahead with funding.

Sometimes the seller already has an RPR available, if so it has to be current and not older than ten years. The seller usually pays for one of these options or will give you a credit towards the purchase price of the home to pay for it.

The RPR will show you where your property lines are located and if anything is encroaching on a neighbor or municipality.  It will also show any structures such as decks, additions, and fences and if they were permitted by the municipality.

Title Insurance is available for both owners and lenders and insures against loss from any defects in the title and provides protection for the enforceability of mortgage loans.

4.      Home Inspector

Once you have found that perfect property then it’s time to get it inspected. When choosing a home inspector, make sure they are licensed and experienced.

An incompetent home inspector can make or break the deal if he does not know what he is doing or not up to date with all the new procedures and technology to make sure that your new home is safe and sound. Get at least three references from other homeowners with first-hand knowledge of the practices of your inspector.

The last thing you need to find out after you’ve moved into your home is that the furnace is on its last legs, or the roof needs to be replaced, or heaven forbid the foundation is cracked and leaking. Most of these issues can be fixed, but they are a lot more expensive than the original cost of the home inspector.

5.      Lawyer

Choosing a good lawyer depends on a couple of factors, mainly price and locality. Most lawyers know how to handle a real estate deal although you still want one with an honest reputation.

You can call around and check fees and choose one who is within your comfort zone on pricing and is familiar with the local area. Your lawyer will make sure that the purchase contract is correct and all the terms set out are followed by the seller. They will also make sure that the property has no issues, such as any existing loans or liens registered on title.

So you see buying your first home isn’t really that scary now that you know some of the procedures to follow. Hopefully, I have answered some of your questions and taken away the mystery of it all.

Of course, there are other factors to consider when purchasing a home not just the five I have mentioned but these are the main issues to consider.

Before you leave please share your thoughts and experiences on this topic in the comment section, I would love to hear from you.