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The Essential Checklist for Homebuyers

Posted: March 6, 2020

Home Buyer Checklist

First-time homebuyers face a series of to-do’s that can feel daunting and unmanageable – at H&H Homes, we are here to make your home purchase journey as smooth as possible, from start to finish. Getting ready to buy a new home means designing a new way of living and turning over a new leaf. In the background, of course, there are financial details, loans, contractual obligations and more to be conscious of.

Check out our 10 Most Frequently Asked Questions.

The four points below will assist you in determining the financial necessities of your home purchase, how to plan for design needs and personalization in your new home, futureproofing your finances and planning a timeframe.

1. Pre-purchase Financial Health Check
First things first – budget things out in detail. You will want to begin the home purchase process with a reasonably strong idea of your budget. How much can you realistically spend? Calculate your maximum expenditure for your down payment, interest, and mortgage – and chart a clear path. Will you pay for these from your savings? Investments?

Have a credit report on hand – your credit history plays a significant role in banks determining an appropriate loan for you. Also, take stock of your monthly expenses and income sources so that you have a clear understanding of your cash flow needs to help you get an idea of what manageable monthly mortgage payments should look like.

Once you’ve taken personal stock of your finances, start to include a lender in the conversation. You want to do this to get a second opinion from a trustworthy professional who can validate your decisions, and get an understanding of the perks and benefits that can come from working with preferred lenders. Lenders will also get the ball rolling to help you start thinking about insurance, a variety of loan options and programs that assist in paying down payments. A quick online search will reveal that there is a bounty of options out there – getting ahead of this in your preliminary conversation will be a major help to you down the road. Our preferred lenders are here.

Another key area your lender should weigh in on is mortgage financing. Working with someone who is qualified to assess your job history and credit report to calculate your debt-to-income ratio will help you arrive at preapproval – one of the most significant milestones in the home buying process. Plus – being pre-approved can speed up the entire process.

You can prepare for this assessment by gathering bank statements, tax returns, proof of employment, pay stubs, your credit report and any other documentation of assets or debts. Heads up that a credit score of 620 or higher is a typical baseline for preapproval.

Between your debt-to-income ratio, your incoming cash, and your financial history, a lender will be able to determine the maximum loan amount you’re qualified to borrow. From there, you’re able to arrive at a down payment price, closing costs and an estimate of the total sales price.

2. Personalizing Your Home
With the homework of sizing up your financial history out of the way, it’s time to get to the exciting part – preparing to personalize your new home with special options and upgrades. It’s safe to guess that one of the best parts of buying a new home is personalizing it to make it your own. Intelligent budgeting should still root all of your design decisions – you don’t want to get your heart set on a series of options that are ultimately not financially responsible.

When it comes to purchasing a newly built H&H Home, your purchase price accounts for the base price plus additional upgrades. This means you need to start thinking about the pricing of your personalized details as you’re working with your lender – think of them as part of the whole purchase, not as add-ons to be calculated later on. At H&H, we make this part of the process fun and easy, courtesy of our Design Studio.

We also make it easy to tour your new home during construction on a periodic basis in order to help you feel involved in the building process.

3. Preparing Your Finances for the Future
Any veteran homebuyer will tell you that additional costs tend to pop up during the buying process – such as a down payment remainder, closing costs, moving costs and unexpected or emergency finances. A down payment remainder is the figure for any part of your home’s total price that you did not pay upfront, and is not going to be included in your mortgage. Closing costs are all too often overlooked and involve purchasing the title to your home, mortgage fees, title insurance, escrow or settlement fees, taxes, and government recording fees. Altogether, closing costs can add up to thousands of dollars.

Moving costs are variable depending on the size of your household, how much furniture and possessions you’re moving and how far you’re moving from. Hiring a crew or renting a truck can also present an enormous cost difference, depending on how you choose to approach the move.

Additionally, getting set up with a home insurance plan and a considerate approach to property tax is a great way to future-proof your finances. Many lenders will advise you to open an escrow account – this protects both you and your lender, and helps you to set a payment schedule that recurs on a regular basis, rather than waiting until bills are due.

Lastly, as most financial experts will tell you, keep some emergency liquidity in order to protect yourself against the unexpected. Plus, many lenders will require cash reserves in order to approve you for a loan. It is important to avoid increasing your credit card debt or any other type of debt during this time to avoid having to start the process over

4. Set Your Timeframe
At H&H Homes, we are frequently asked about timing. For instance – how quickly can you move into your new home? If you own the home you’re moving out of, how should you time the transition between selling your existing house and closing on your new house?

Once you have found a community that suits you and your desired home is already built, you can expect to move in within a 30-45 day period. However, if you are interested in a newly constructed home, the timeframe is more like 6-8 months.

If you already own a house, you’ll want to button up your timeline to ensure that you are closing on the new house around the same time that you sell your existing house. We are happy to work with you to determine your unique needs around selling and preparing to close on a new home.

Finalizing your contract also comes with some important final pieces – read closely through your contract to ensure that all of your needs are met when it comes to home plans that correspond with the choices and custom options you’ve made; a specific price; default and notice provisions that help you understand how to plan for any financial problems or other disputes.

Learn more about H&H Homes’ floorplans, communities and cities we build in across North and South Carolina here, or search by city on our homepage. The team at H&H has worked with over 7,000 homeowners and is passionate about providing excellent service and sales counseling. Get in touch today to learn more about us.

For more frequently-asked homebuyer questions, please visit our new home-buying FAQ page.

If you’re a first-time homebuyer, be sure to visit our page entitled, Steps to Buying Your First New Home for additional advice.