Steps for Buying A Home
Are you ready to buy a home? There is a lot to consider before you go falling in love with a property. Take a look at the home-buying steps below so you can get started in the search for your dream home.
Before you have a lender check your credit score you should know what your credit report would look like. Your lender will pull a credit report that provides them with data from three major credit reporting industries. These industries are TransUnion, Equifax, and Experian. The report will calculate your FICO and Vantage score. A FICO score calculates your creditworthiness and a Vantage score is what you see when you check your score on consumer credit check websites. The higher your credit score, then the lower your interest rate should be.
If you’re trying to improve your credit score before applying, work on the following: Payment history
- Total debt
- Length of credit history
- New credit
- Type of credit
Get Pre-Approved/Figure Out What You Can Afford
When you work with a lender to get pre-approved, you will find out the maximum dollar amount you can borrow. This is the number you need to know how much house you can afford. This is figured by considering your income, debt, and projected down payment. Once you know your budget then you can decide what you are looking for that will fit in your price point. Consider the following:
- Number of bedrooms and bathrooms
- Square footage
- Outdoor space
- Preferred location
- Type of home
- Layout, features, and finishes
- School district
- Work commute
Find A Real Estate Agent
A professional real estate agent will guide you through the entire process. They help provide you with market insights, offer prices, negotiate, and their professional experience. Find an agent that you trust and who takes the time to understand your situation.
Start Your Home Search
You can now start your home search. This is the house-hunting process. You can start your search online with your agents and begin to go to open houses or showings of homes that you are interested in. Keep an open mind and stay flexible. As you look you may find that you adjust your criteria.
Make An Offer
Once you find a home you love then it is time to make an offer. Your agent will walk you through writing a fair offer according to a comparative market analysis and your budget. In this offer, your agent will include any contingencies and disclosures you need as well as the potential closing date.
If an offer is accepted you will enter into escrow. An important part of the process is the home inspection. Your agent will schedule the home inspection to ensure you know everything about the home you are buying.
Secure Your Financing
You will secure your financing with your lender by completing some additional steps past the pre-approval process. One of the big components is the appraisal of the home to make sure it is valued at what you have offered. Your lender will be the one to give the clear to close once your financing is fully secure.
Homeowners Insurance Policy
Before closing, you will need to show proof that you have purchased a homeowners insurance policy. You can shop for this policy to find what is best for you and this policy can be paid for overtime through your monthly escrow account.
Finally, you will close. You will complete a final walk-through and sign the paperwork as well as provide any funds needed to cover closing costs. Lastly, you will receive your keys and get ready to move and settle into your new home.
If you would like more information on the home-buying process, contact us!