Buying a home for the first time can be overwhelming and exciting all at once. You might find it difficult to get yourself up to speed on the knowledge and expertise of the agents working with you throughout the homebuying process. While you may not feel like you know everything there is to know about the world of real estate, the home buying process can be broken down into five steps that - once you understand them better - can help you have a more seamless and relaxed home buying experience.
Step 1: Get your finances in orderDown Payments
Your first step throughout this process should be to understand how much house you can afford. If you provide 20% on your down payment and have a moderate debt to income ratio, you can expect to be approved for a home loan that could be up to three to five times your annual income. Typically, you will want to provide anywhere from 10%-20% for your down payment.Credit Scores
You will need to check a few other things including your credit score, your monthly spendings, and your savings. Most lenders require a minimum credit score of 620. The higher your credit score is, the more likely you are to be approved for a home loan. To determine your credit score, you can check with your bank to see if they offer free credit score reports, or you can utilize a free credit score reporting site online such as Credit Karma.Savings
It is important to have more than a few months worth of earnings in your savings to stay on top of your house fees and expenses. Although a loan will help to spread the cost of owning a home over a fifteen or thirty year period, you will still be required to pay for some things upfront like your down payment and closing costs.
Step 2: Select your mortgage loan
Your mortgage is the monthly payment that you make on your house in order to pay off the loan you receive. Before you can officially purchase a home, you will need to be prequalified for a mortgage loan. For prequalification, you will need to provide documents showing your income, savings, and investments to your mortgage banker who will review the information and tell you how much your loan will be. With this information, you will know what price range you can look in for homes.
Once you know how much your loan will be, you can start thinking about which type of loan you want. The loan you select will depend on your personal situation as well as your estimated mortgage. Some homebuyers are focused on having one fixed rate for the entirety of their payments. Others know their home will be a temporary purchase and want low up-front costs.
There are five basic types of mortgage loans:
- Conventional: these are the most common due to the loose requirements on income, home type and location
- Fixed- rate: you will pay the same amount every month
- Adjustable- rate: these have low interest rates at first, and will increase over time
- Jumbo: typical for buyers purchasing a high-end home with a strong credit score
- Government- insured: ideal for people with low savings or who do not qualify for other loans
Step 3: Begin the Hunt for Your Perfect Home
After selecting your loan, you will want to find a real estate agent to help you through the house hunting process. At Holland Homes, we have many trained agents to help you tour various floor plans, homes, and communities to find your perfect fit. Our agents can explain more in-depth about our homebuying and selling to help you understand the process from start to finish.
Holland Homes Sales is our sales department that specializes in buying our customizable homes in all of our regions. Our team has extensive knowledge of all of our services, homes, and communities.
Once you have found an agent, you can begin scheduling tours in our various communities throughout Auburn, Opelika, Birmingham, Lake Martin, Chelsea, and Springville.
Step 4: Complete Ownership Paperwork
Once you have your loan selected, you can move forward with the paperwork to assume ownership of the home you have selected. You will have to fill out the land or property deeds, as well as the title of the home to take full ownership. This paperwork will be completed alongside your agent who can help you understand more about the process.
Step 5: Customize your home
Holland Homes builds customizable homes which gives each and every house a unique feel and a personalizable experience. Our buyers are able to come into the home during the final stages of the building process and choose all of the flooring, finishes, light fixtures, and many other decorative accents.
You will be guided by our designers who can help you craft your desired aesthetic in every room of the house. Our team is here to help take the stress off of you and make customizing your home an enjoyable experience for you and your family.
Our process of designing generally occurs in one day and usually takes only a few hours. Certain design packages allow you to customize various elements including flooring, cabinets, knobs, and paint color. After everything is complete, your new home is move-in ready!
How We Can Help
At Holland Homes, we aim to bring our customers the home of their dreams centered on their aesthetic. We provide customizable and move-in ready homes in new communities; so, contact us today to learn about what’s available!