What Is The First Step In Buying A Home - Real Estate

Published: October 4, 2021

What is the first step in buying a home? You should always talk to the bank first before you shop for real estate. Many people have done the opposite only to find that they wasted a lot of their time because of a low credit score.

However, knowing what your credit report says about you, good or bad, should be your first step when buying a home. You should also have a down payment ready because there’s no such thing as a free handout. Make sure that you don’t owe any money for collection accounts on your credit file.

A down payment for a home is between 3 - 30 percent, depending on the lender. Most FHA loans require about 3 to 10 percent. A conventional loan from a local bank will want 10 to 30 percent down.

Paying a mortgage is probably the biggest investment you can make. Most people who own a home have never made a rent payment. If they choose to sell their house, they usually recoup everything, as if they lived on the property for free.

Homeowners can also deduct the interest they paid on a mortgage, property tax, and certain costs for energy-efficient upgrades.

The next step is to get a pre-approval from a bank because it will help you in many ways. For example, a seller gets two similar offers with one accompanied by a letter from the buyer’s bank, and the other with no supporting documents. It’s quite obvious who the seller will want to consider.

If this is your first time buying a home, then then first step remains the same, except you will get some government incentives. Finding the right property and lender are the crucial elements towards the end of a deal. The other out-of-pocket expenses are the closing costs, and that can be anywhere between $1,500 to $10,000 depending on the selling price.

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