It’s a fact that very few things are as stressful or as costly as buying a home. This is a complex process that includes everything from choosing the neighborhood to live in and mortgage rate to finding the property that suits you best and actually buying it. And whether you are buying a home on your own or with a partner, you need to have a clear vision of what you want. When you know what that is, you will be able to face and overcome all the difficulties on the way. Our ultimate Iowa home buyers guide is here to help you every step of the way.
Get your finances in order
Since you are preparing for the biggest financial commitment you have ever made, your finances need to be in order. Houses can be very pricey, so chances are that you need to get a home loan and save for a down payment. But before you talk to the banker, put your home buying budget on paper and think about the price you could afford. No one cares about your money more than you do, so you need to make this call.
Keep in mind your current income and expenses. Most importantly, you should know exactly where you stand right now before you make any investment. Track down your expenses for the past few months and compare them with your incomes. And we’re not just talking about your income and debt, but all of your living expenses, too. Make sure to include food, gas, insurance and all other expenses you may have. How much are you saving on a monthly basis? When you come up with some figure, don’t plan your mortgage rate in the exact amount, leave something aside. You always need to have some savings for unforeseen circumstances because life is full of surprises.
Check your current credit score and don’t sign up for any new loans or credit cards. Your credit score and history will determine if you qualify for a loan and how high your monthly rate will be. For starters, you should save money for the down payment and moving costs. Obviously, the more you have for a down payment, the better your loan terms and rates will be. Having 3% of the total home price is a minimum for a down payment. Also, the down payment needs to be in your checking account or savings for at least 2 months prior to getting loan pre-approval. Hence, you probably shouldn’t rely on the returned deposit on your rental.
Additionally, you may be asked to write a check for earnest money when you make an offer on a home. It is usually about 1% of the purchase price and will be credited to you when you sign the final paperwork, but needs to be available when you make an offer. Also, you shouldn’t’ forget the moving costs and car shipment costs.
After you have tracked all your expenses and moving costs and know exactly where you stand, it’s time for a big decision. Be honest with yourself when deciding how much you can afford to pay for a house. Be ambitious but also realistic. Keep in mind all additional expenses that go along with owning a home, such as property taxes, homeowners insurance, repairs, and maintenance.
Find a good real estate agent
You have probably already looked at some houses for sale online. It’s a fun way to explore the Iowa real estate market and neighborhoods you like. Doing the research is one thing, but buying a house is another. When it comes to deciding on a house and actually buying it, better seek out the expertise of a real estate agent. A reliable and experienced real estate agent knows the local neighborhoods and market.
Your real estate agent represents you and takes care of your interests. The agent keeps your wishes as a top priority and helps you navigate the real estate market. He or she will help you find and make offers and negotiate on your behalf. Most noteworthy, the seller almost always pays the real estate agent fees, so it probably won’t cost you a thing. To find a trustworthy agent, ask your family and friends for recommendations, but also interview agents before you start cooperation.
Our Iowa home buyers guide highly recommends getting pre-qualified for a mortgage even before you start looking for a home. This way, you will know the price you can afford and should be looking for. For filling the mortgage application, you need to provide information about your income, assets and the type of mortgage you are applying for. Your credit report will be pulled to check your creditworthiness. Make sure to supply all the requested information on time for quick mortgage approval and a smooth home buying process.
This is a creative and personal part of the process – looking for an ideal home. If you are moving locally, you will have the privilege to visit every home you are considering to buy. On the other hand, a house hunt from afar could be quite a challenge. Therefore, if you have some friends or family members to see the house for you, ask them to do so. Don’t trust the photos, they can be deceiving.
And once you have found your new home, your agent will help negotiate the terms of the sale, including the price, possession date and any seller’s concessions. If the date of entering your new home is after the date, you have to leave your previous place, no worries. You can find a temporary place to store your belongings in the meantime. There is a variety of storage solutions at your disposal in Iowa, so just pick what suits you best.
The next step is to submit your pre-approval letter along with your offer to the seller. Make sure to discuss all the details of the purchase agreement with your agent.
- Check your credit score
- Get pre-qualified for a home loan
- Gather all the documents required
- Pick a real estate agent to help you with the home search
- Find a home you love
- Make an offer and sign the contract
- Complete your official mortgage application
- Let your agent manage the entire transaction to closing
- Get your new home keys and enjoy
The ultimate Iowa home buyers guide
We really hope our ultimate Iowa home buyers guide will help you go through this process stress-free. It will be one hell of a ride, but when it’s over, you will be home. Enjoy it to the fullest.