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HOMEBUYING 101

Thinking of purchasing a home but not really sure how the process works? Nathan Fitts & Team is here to help!

 

Buying a home will likely be the largest purchase of your life, so it can be a little daunting, but, with the right support team, your journey to home ownership will be smooth and very rewarding!

So your first question may be “why should I buy a home?” There are countless advantages of buying a home. A home’s value tends to increase, you are working to secure your family’s financial future, you are building equity, and you are free to customize and increase the value of your home. Other advantages include improving your credit worthiness, tax benefits, and, most importantly, you will eventually be free of payments!

 

Now that you’re thinking a little more seriously about purchasing a home, you may be wondering how involved this process may be. The first step is to obtain mortgage approval. Following approval, you will begin your home search. Once you find the perfect home, you will make an offer. After the negotiation and acceptance of your offer, you will go through an inspection and appraisal, and then you sail on to closing and voila there are the keys to your home! Yes, it’s really that simple. Nathan Fitts & Team welcome the opportunity to be your guide throughout the home buying process. Working with countless area vendors, Nathan Fitts & Team will help you select a support team that is perfect for your situation.

 

Unless you are paying cash for your home, the first vendor is your lender, and the first step with them is qualifying for a mortgage. To get preapproval, your lender will have to verify your income and assets, as well as your debt-to-income ratio. It is a good idea to start gathering last 2 years of tax returns, last 2 years of W-2, recent pay stubs, documents to show other sources of income, complete list of creditors with balances and minimum monthly payments, and recent statements of all bank accounts and other savings accounts prior to meeting with your lender.

 

There are a variety of mortgage options. Examples of these include conventional, FHA, and VA mortgages. Conventional mortgages follow guidelines set by Freddie Mac or Fannie Mae, two government-sponsored enterprises that invest in loans to allow lenders to lend more. FHA Mortgages are mortgages that are insured by the Federal Housing Association. This type requires lower down payment than other programs, an excellent option for first-time home buyers. VA mortgages are insured by the Department of Veterans Affairs. This type of loan is available to veterans, National Guard members, active-duty personnel, and eligible surviving spouses.

 

When you obtain a mortgage, you will pay a monthly rate. You cannot choose your rate; however, you can choose what type of rate. Rate types include fixed and adjustable rates. A fixed rate means that the rate will not change over time. The only time this rate can change is if you refinance your loan. With a fixed rate, there are no surprises – your monthly principal and interest will always be the same. An adjustable rate, on the other hand, includes a fixed interest rate that lasts five, seven or ten years. After the fixed period, your rate will change each year based on market conditions. An adjustable mortgage can be a great option if you plan on moving or refinancing within a few years.

 

Once you qualify for your loan, the next step is to find a realtor, but you have already completed this task! Nathan Fitts & Team will work alongside you to help define your search criteria and begin previewing homes that may be of interest to you. Things to think about in regards to defining your home search are the neighborhood you are looking in, school district, number of bedrooms/bathrooms, acreage, style home, the age of the property, etc.

 

After previewing homes that meet the items on your wish list, and you have found “the one,” it is time to make an offer! Your offer will include information such as the address of the property, names of buyers, the price you are offering, any conditions that must be met before the home can close (contingencies), items that are included in the sale, your earnest money deposit, potential closing date, and a deadline for the sellers to respond to your offer. After your agent presents your offer to the listing realtor, the negotiation process begins and continues until acceptance. Be prepared to compromise when it comes to this step, but, remember, it is worth it! Once your offer has been accepted, it’s time to sign the paperwork with your agent.

 

After acceptance, it is time for inspection. This is the time that you will learn everything that may need to be repaired on your home. Following your inspection, your lender will require an appraisal to make sure the property is worth what you are paying for it. Once these steps are completed, you have almost made it to the finish line; it is time to close your loan!

 

Your realtor and mortgage lender will help you select your closing attorney, if you do not already have one in mind. Title work will be completed, which includes checking for liens, confirming ownership, and then the closing statements will be prepared. On the day of closing you will need to have your funds wired to your closing attorney that will cover your down payment and closing costs. You will sign documents, and, last, but not least, you will obtain the keys to your new home!

 

After reading through the home buying process, you may still have questions, but don’t fret. Nathan Fitts & Team, along with First Community Mortgage Group and Kevin Panter Insurance, invite you to “HOMEBUYING 101,” a FREE home buying informational session, Thursday, April 13, at 6:00pm at 83 Blue Ridge Overlook, Suite 2. Please RSVP on Facebook Nathan Fitts & Team or call (706)632-3000.

 

Hurry! The joy of home ownership awaits.

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