If you are thinking of buying your first home in Merrillville you are not alone. With interest rates being at all time lows there has never been a better time to buy a home. Your first thought might be; How much money will I need? That will depend on the type of mortgage you are applying for. If you are thinking of applying for an FHA mortgage you will need 3.5% for down payment + Closing Costs which are the costs charged by the lender to process your loan. Closing costs vary from lender to lender, but with FHA you can finance these closing costs which means you can add them into your mortgage. If you choose to go conventional you will need 5% down payment money, although there are lenders who charge as little as 3% down payment + closing costs. The thing to remember is the more money you put down the lower your mortgage payment will be.
Your first step should be to find a Merrillville real estate professional you feel comfortable with. Most agents in the first meeting will probably perform a Home Buyer Qualification Worksheet. Some of the questions that will be asked by your agent will be what is your monthly income, what outstanding debt you have (this will include credit cards, car payments, student loans, etc.) and how much money you have for a down payment. Using this information they can estimate how much home you qualify for. Your Merrillville agent will then use this qualifying amount to find homes to buy that will fit your budget. Most agents belong to a multiple list service (MLS). The Merrillville MLS service will provide the agent with a data base of all homes listed within the area and a Realtor member can access this information and pass it on to their clients in the form of computer print outs or emails. Your Merrillville Realtor should also have access to builder information which may not be in their MLS and access to HUD listings. HUD listings are homes someone with a HUD insured mortgage (FHA/VA) lost to a foreclosure because of not being able to make the payments.
Your next step should be to meet with a Merrillville lender to get pre-approved for a loan. Your agent can provide you with a list of lenders they have worked with and trust. For your appointment with the lender you will need to take with you two years of tax statements, the account numbers of all your credit cards, car loans, student loan, etc. The lender will run a credit check and if all goes well will issue a pre-approval letter which you will need when making an offer on a Merrillville home you wish to buy.
Next you will meet with your Merrillville agent and view the homes you want to buy that you feel will work. When you have come to a decision on what home to buy, you will get together with your agent and write an offer. This is when you are required to bring an earnest money deposit. Earnest money is a deposit to prove to the seller of the home you wish to purchase that you are serious about buying their home. The amount of earnest money varies but can be anywhere from $500 and up depending on the price of the home and what the Seller says he needs to take the home off the Merrillville market. This money is part of the initial down payment money you have set aside and is not in addition too the down payment money. The agent will also ask what type of loan you are applying for, questions regarding when you want to close, etc. In my opinion one of the most important questions your agent will ask is if you want to have a home inspection. I feel this is one of the most important parts of the offer to purchase because you want to make sure that your biggest investment is also one of the most sound investments you will make. You don’t want to buy a home and find that there are so many repairs to make to the home that you end up not being able to afford your new home. You can ask your agent for a list of inspection companies or you can check the yellow pages. After signing this offer to purchase with all the terms and conditions explained to you, your agent will present the offer along with your earnest money deposit and pre-approval letter.
Your offer may be rejected, countered or accepted. In either case your Merrillville agent will advise you what your next step should be. That is why it is important to work with an agent that is knowledgeable and you feel comfortable with. If your offer is accepted you will have a specific amount of time, depending on what was written in your offer, to go back to the lender to do a formal application, to have your home inspection and to close.
Buying a home can be one of the best investments you make especially in the Merrillville market. You will not only be building equity since each year you own your home the value will be going up, but interest can be deducted from your taxes saving you a lot of money each year. The most interest will be in the first years since most of the monthly payment will be interest.