Melissa Kubala of Houston, TX has been an experienced realtor and investor since 2002 – but she was already “in the business” renovating homes and investing with local builders in and around Heights, Oak Forest and Montrose years prior. In the following article, Melissa Kubala discusses the ins and outs of homebuying, from assessing finances to closing the deal.

For many people, buying a home is an exciting milestone in their lives. Unfortunately, the process can be complex and daunting for first-timers.
Careful planning, understanding essential steps, and dedication to detail are essential ingredients to make the process successful.

First, Assess Finances

Melissa Kubala, Realtor says that before anything else, clients need to assess their finances.

The initial step should be reviewing credit scores and reports; an excellent score (usually above 740) often leads to better mortgage terms and lower interest rates. Potential homebuyers can obtain free credit reports from each major bureau: Equifax, Experian, and TransUnion.

Next, it is essential to determine affordability. A general guideline suggests that monthly housing costs shouldn’t exceed 28% of a person’s gross monthly income. Total debt payments, including housing costs, should not surpass 36% of gross monthly income. These guidelines can help potential home buyers create a realistic budget for their purchase.

Finally, Melissa Kubala, Realtor says that saving for a down payment is an essential step. Most lenders require at least 3-5% of the home’s purchase price as a down payment; however, higher down payments can lead to better mortgage terms and lower requirements – for instance, putting 20% down, helps homeowners avoid private mortgage insurance (PMI) costs.

The Pre-Approval Process

This is the next step in the approval process.

Melissa Kubala of Houston, TX says that once finances are in order, it’s time to select a lender and start the pre-approval process. Shopping around and comparing loan offers from multiple lenders may lead to better mortgage rates and terms. Working with a mortgage broker may simplify this step since they provide guidance and negotiate on behalf of the homebuyer.

Pre-approval applications typically require documentation of income, assets, and debts. A pre-approval letter outlines the maximum loan amount a lender is willing to offer based on an applicant’s financial information. This letter is essential for prospective buyers as it proves their eligibility for obtaining a mortgage and gives them leverage when making an offer on a home. Most Realtors require prospective Buyers to submit a pre-approval letter with their offer.

Understanding mortgage rates is essential, as they directly influence the cost of borrowing. Factors influencing rates include the borrower’s credit score, loan term, and current market conditions. Fixed-rate mortgages offer stability with a consistent interest rate over its entirety; on the other hand, adjustable-rate mortgages (ARMs) offer variable interest rates based on market fluctuations.

Searching for a Home

Melissa Kubala of Houston, TX says that once the pre-approval letter is in hand, it is time to find a real estate agent. A knowledgeable agent can offer invaluable insights, access to listings, and assistance throughout the homebuying process. They often will assist buyers in defining their search criteria based on factors like location, budget, property type, and desired features.

Touring potential homes is an exciting part of the homebuying process. Prospective buyers should take notes during each visit, paying particular attention to aspects like layout, condition, and neighborhood. An experienced Realtor should offer fact-based information about the general and specific location, how it compares to surrounding streets or neighborhoods, and be able to point out any features which may positively or negatively impact comfortable livability or resale. Additionally, taking photos or videos for later reference when comparing properties can be useful.

Making an Offer

Once a property is identified, Melissa Kubala says that it’s time to make an offer. Understanding the bidding process is essential for submitting an effective bid. A real estate agent can provide valuable insight into market conditions, recent sales in the area, and other elements that could influence the offer price.
When crafting an offer, it is essential to factor in contingencies. Common contingencies include financing, appraisal, and inspection. These conditions safeguard the buyer by allowing them to walk away from the deal without incurring a financial loss if certain criteria aren’t fulfilled. However, in a competitive market situation, they also weaken the offer – thus, it is important that a Realtor has recent experience bidding in that specific market so that they may guide the client in making an appropriate offer.

Melissa Kubala says that negotiating terms is an integral part of the homebuying process. Buyers should expect to have lengthy conversations with sellers, either directly or through their agents. Therefore, it’s essential to remain flexible and open-minded throughout this period, as compromise may often be necessary in order to reach a mutually beneficial agreement.

Home Inspection and Appraisal

A home inspection is an integral part of the homebuying process. Hiring a professional inspector helps identify potential issues with the property that may need repair or negotiation. Researching and selecting an experienced, licensed inspector with expertise in the local area is essential.

After the inspection, homebuyers will receive a report outlining the findings. This report covers structural integrity, electrical systems, plumbing, and heating/cooling systems. Buyers should read through it thoroughly and discuss any concerns with their agent; they can then advise on the next steps, which may include renegotiating the offer or requesting repairs.

Melissa Kubala says that an appraisal is a critical step in the buying process, as it provides an unbiased estimate of a property’s worth. Mortgage lenders require an appraisal to guarantee that the loan amount does not exceed what the house is worth. When calculating value, appraisers take into account factors like location, size, and recent comparable sales in the area.

Concluding the Deal

As the homebuying process nears its conclusion, confirming mortgage details is paramount. Buyers should collaborate closely with their lender to provide any additional documentation needed and guarantee that all conditions have been fulfilled. Communication during this stage is key, as delays could negatively affect the closing date.

Reviewing closing costs is an essential step before signing documents. Melissa Kubala, Realtor says that typically, closing costs range from 2-5% of a home’s purchase price and can include fees such as loan origination, title insurance, and property taxes. Buyers should request a detailed breakdown of these expenses and discuss any discrepancies with their lender or agent.

Finally, the closing day arrives. At this meeting, all parties involved in the transaction assemble to sign documents, transfer ownership, and complete the deal. After all the paperwork is signed and funds distributed evenly among them, the buyer is presented with their new home’s keys!

Melissa Kubala, Realtor says that navigating the homebuying process can be intimidating, but with careful planning, working with experienced professionals, and staying informed throughout every step, buyers can achieve their dream of homeownership. By being knowledgeable about everything from mortgage rates to home inspections, prospective buyers will feel confident throughout every step of the process until they successfully close on their ideal property.