A matter of land | We want to buy our first home, what do we do?
Today we have a guest columnist, mortgage specialist Cassandra Francis, who will answer a question that I have received from a reader.
Good day Mr Francis,
I read your articles most weeks and I find them very informative, helpful and entertaining at times.
I now need your advice and would really like to hear from you. The situation is that my husband and I are interested in buying a property.
What we want to know is:
- How do we go about this?
- What is our first step to achieving this goal?
- How do we know how much monies we can get from a particular institution?
- What are the steps we take to owning our first home?
I look forward to your response.
Good day R.H.,
I am not Mr Francis, but we are both thankful for your support of A Matter of Land and I will provide you with details on all the steps you need to take from inception to getting your key.
The first step to home ownership is like a dating process to marriage, where the first move would be dates. This process could be considered as the first date in the 'courting process' for new buyers.
Many persons think the first process is to visit a realtor or go to the market to seek a property to purchase. This is actually an incorrect way to go.
This way is the reverse of what should happen, as before you go shopping, you should know your budget. You can't go on a date and not know how much you have to spend or you may just go to a place where you can't afford to pay for what was ordered.
Similarly, before you go house hunting you should first determine your budget and what you can afford.
This will help you to be specific in what you are looking at as you will have a realistic idea of what you can afford and how much you will need to come up with as a deposit.
GET 'PREAPPROVED' BEFORE GOING HOUSE HUNTING
Getting a mortgage preapproval is an essential step in the home-buying process. Real estate agents and sellers want proof of the buyer's ability to secure a mortgage and to bid on a property.
In addition, you need to establish the level of your buying power and what your potential closing costs and monthly payments will be.
HOW DO I GO ABOUT BEING PREAPPROVED?
The preapproval process is quite simple, it entails providing your income details and for you to outline any existing debts you may have. Persons residing overseas will require a credit report, which should include their credit score.
It should be noted that you can join with other persons to purchase a property, and that similar documents will be required for the other party or parties.
Some private landing institutions also have a joint mortgage programme with the National Housing Trust (NHT). Through this programme, the institution and the NHT combined will lend up to 95 per cent of the purchase price, or the market value, whichever is the lower of the two, in the case of house purchase, or 75 per cent financing in the case of purchasing land.
I will apply to the NHT on your behalf, and the Trust will confirm your eligibility. You need not go to them and then come to me, as we operate a 'one stop shop' mortgage
As a matter of fact, you need not come into my offices, I will come to you at a time convenient to you.
Once I am in receipt of the preapproval documents, an assessment will be carried out and the preapproval letter is issued.
The information confirmed in your letter is the amount you are preapproved for, the interest rate, the term and the monthly payment. You can now present this letter to your realtor or vendor to start your negotiations.
The letter is usually valid for up to three months. If at the end of the three months you have not found a property you wish to purchase, you then have the option to reapply for a new preapproval letter.
Next week I will continue with the process towards home ownership.
Until next time, traverse well.
- Craig Francis is a commissioned land surveyor and managing director of Precision Surveying Services Ltd. He can be contacted for questions or queries at email@example.com or Precision Surveying Services. You can contact Cassandra Francis at firstname.lastname@example.org or 876-276-5360.