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How to Buy a New Home
The first step in buying a new home is to look at your financial situation and decide what you can afford to spend for a new home. Here are some examples of the monthly payments for a 30-year fixed mortgage at 6% (your actual term/rate may be lower or higher):
Keep in mind that your lender may require additions to your mortgage payment such as an escrow payment for taxes and insurance (on average about $75-$125 per month).
You'll also need some money up front for a down payment and closing costs. Depending on the type of mortgage loan, down payments can be anywhere from 0% to 20%. Closing costs and pre-paid costs (i.e., insurance, etc.) average around 2-3% of the total cost of the home. These amounts will be collected at closing.
Go ahead and talk to banks or mortgage lenders about getting a loan (I'd be glad to make some recommendations if you need them). Let them know the general price range you're considering. Be honest with them about your income and credit information. Your lender will help you to determine ahead of time the amount of loan for which you will qualify.
Now the fun part: shopping for a new home. Look in neighborhoods which you find appealing. Think about the benefits of various locations (proximity to work, schools, churches, etc.). Do you want to buy an older home and perhaps do some work yourself to improve it? Or do you want to enjoy the benefits and pleasures of buying a brand new home? Obviously I hope you'll decide to buy a new home from me; I know you'll be pleased if you do.
So you've looked around and decided that you're interested in buying a home from Carolina Homes? Great! You don't need to talk to a realtor; just call me and tell me, and we'll meet together at the house. If the home is not quite finished, we'll discuss the work left to be done (you might even get to choose some of the remaining details and colors). You'll probably have a few questions, and I'll do my best to answer them.
Once you decide on the house, we'll sign a purchase agreement. On most of the homes I build, I can either discount the price a little bit or help pay some of your closing costs. We'll decide which of those options works best for you and put it in the contract. You'll write me a check for the earnest money (usually around 1% of the purchase price); that represents your promise to buy the home as soon as you get your mortgage ready. If you change your mind (I've never seen it happen), I would get to keep the money. If, for some reason, you are unable to obtain a mortgage to buy the home, I would return the money to you.
Take a copy of the contract to your mortgage lender. He will let you know what further information he/she may need from you (i.e., income verification, etc.). The lender will probably call me and let me know what he/she may need from me.
You will need to obtain insurance coverage for your new home. Call your insurance agency and tell them about the home you're buying. They will send proof of insurance to the closing agent.
A closing time and place will be established. Usually the seller determines the place of closing (I have used Guarantee Title for several years; they are excellent to work with and their charges are very reasonable), but some lenders may require a closing agent of their choosing. Either way, the closing agent and mortgage lender will work together with the buyer and the seller to get everything ready for the closing. The time between the signing of the contract and the actual day of closing is usually about 2-3 weeks.
The big day finally arrives. We'll meet together at the office of the closing agent. You'll sign a lot of papers regarding the mortgage loan. I'll sign some papers giving you ownership of your new home. I'll remind you to contact the utility companies to change everything into your name (i.e., Alabama Power, South Alabama Utilities, Mobile Gas, Mobile Water). Then I give you the keys and it's all yours. Move in and enjoy!