How to Choose House: A Step-by-Step Guide

Choosing a house requires following these steps, covering the entire process from preliminary preparation to final transaction:

1. Assess Home Buying Eligibility and Financial Capacity Before buying a house, confirm whether you meet the home buying conditions, including:

• Savings and Emergency Funds: Prepare a down payment, transaction taxes and fees (such as deed tax and stamp duty), and at least 3-6 months of living emergency funds to cope with unexpected repairs or income fluctuations.
• Income Stability: Ensure a stable source of income for the next 3-5 years to avoid the risk of mortgage default due to unemployment or salary reduction.
• Credit and Debt: Check your personal credit report to ensure there are no overdue records; calculate the debt-to-income ratio (DTI), which generally needs to be below 43% to meet loan requirements.
• Long-term Planning: If you plan to relocate in the short term (such as within 1-2 years), renting may be more cost-effective; if you plan to settle down, buying a house can accumulate assets.

2. Determine Home Buying Budget

• Down Payment Planning: Calculate the affordable house price range based on savings and loan policies (such as the down payment ratio for first-time home buyers). For example, if the down payment is 20% of the house price, the maximum total price is 5 times the savings amount.
• Monthly Mortgage Affordability: The monthly mortgage payment generally should not exceed 30% of monthly income, and additional expenses such as property management fees and utility bills need to be reserved.

3. Apply for Mortgage Pre-approval

• Submit Documents: Provide income proof, credit report, asset proof, etc. to the bank to obtain a pre-approval amount.
• Lock in the Interest Rate: After pre-approval is granted, you can lock in the current interest rate to avoid the impact of interest rate fluctuations on costs during the home buying process.

4. Choose Mortgage Type

• Fixed-Rate Mortgage: The interest rate is stable, suitable for long-term residents.
• Adjustable-Rate Mortgage (ARM): The initial interest rate is low, but you need to bear the risk of future interest rate increases.
• Government-Supported Loans: Such as FHA loans (with a down payment ratio as low as 3.5%), suitable for home buyers with insufficient down payments.

5. Entrust a Professional Real Estate Agent

• Screening Criteria: Choose an experienced agent who is familiar with the target area. You can request to see past transaction records and customer reviews.
• Clarify Needs: Explain your budget, house type, school district, and other core needs to the agent to avoid ineffective house viewings.

6. House Viewing and On-site Inspection

• Key Inspections: House structure, lighting, noise, and surrounding facilities (such as schools, hospitals, and transportation).
• Record Problems: Take photos or videos to record the parts that need repair or renovation as a basis for subsequent price negotiation.

7. Submit a Home Buying Offer

• Reasonable Pricing: Refer to the recent transaction prices in the same community and adjust the offer based on the house condition.
• Additional Conditions: You can request the seller to bear part of the repair costs or extend the handover time.

8. Complete Mortgage Approval

• Supplementary Documents: Provide the purchase contract, down payment proof, etc. as required by the bank.
• Confirm Loan Details: Check the interest rate, term, repayment method, and other terms.

9. Arrange for House Inspection

• Professional Inspection: Hire a certified inspector to check the house structure, electrical circuits, pipelines, etc. to identify potential problems.
• Repair Negotiation: If serious defects are found (such as roof leaks or foundation problems), you can request the seller to repair them or reduce the price.

10. House Appraisal

• Bank Requirement: The appraiser determines the house price based on market value. If the appraised value is lower than the contract price, you need to make up the difference or renegotiate.

11. Final Negotiation and Contract Signing

• Based on Inspection and Appraisal Results: If the house needs repair, you can request the seller to bear the costs or reduce the selling price.
• Sign the Contract: Sign after confirming that all terms are correct and pay a deposit (usually 1%-3% of the house price).

12. Complete the Transaction and Transfer of Ownership

• Pay Taxes and Fees: Including deed tax, stamp duty, and agency fees.
• Transfer of Property Rights: Go through the transfer procedures at the real estate registration department and obtain the real estate certificate.
• Handover of the House: Check the house keys, utility cards, etc., and confirm that there are no remaining problems before completing the transaction.