The Homebuying Process Made Simple
Whether you're a first-time home buyer or a seasoned expert, purchasing a home can be exciting yet intimidating. It's a big undertaking, but having the right tools can help take the anxiety out of the homebuying process. Luckily, as your mortgage expert I'm here to help, offering a few easy steps to help you navigate the homebuying process.
8 Quick Tips for Buying a Home
Before you contact a realtor or start surfing real estate websites, prepare yourself and review your finances. That way, when you do find your dream home, you have all the information you need to make it your own. Here's how to get started:
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Know What You Can Afford Before You Shop
Before you fall in love with a new property, it's important to understand the full financial impact of purchasing a home. After you explore our variety of financing options, as your trusted advisor I can outline the best choices for your budget, determining a price range and helping you estimate closing costs. If, for example, the expenses on a $400,000 home are already going to be a stretch, then it's probably smart to consider a lower price tier.
During this first step, do a deep dive into your finances and think through exactly what you want and need from your new home. Don't forget to consider other expenses that accompany owning a home, such as upkeep and maintenance costs, property taxes, and homeowner's insurance. Knowing what percentage of the home's purchase price you'll need upfront can also help you determine how much home you can afford. Check out the free mortgage calculator to help set realistic goals so you don't overextend your finances.
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Start Saving Early
It's no surprise that buying a home is expensive, but the actual numbers can still be startling. The amount you'll need for a down payment will vary based on the type of loan you're seeking. We offer VA, USDA and other loan types that, depending on your eligibility, may not require any down payment. Saving is always a good idea, though, and preparing for a 3%-5% down payment is probably a safe estimate. That means if the home you want costs $400,000, you'll possibly need $12,000-$20,000 to get started.
There will be other fees throughout the process as well, such as closing costs, appraisal and inspection fees, title searches, and insurance, all of which can quickly add up. The earlier you start saving for these expenses, the better off you'll be.
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Check Your Credit Score
Your credit score is an important factor in assessing your eligibility for a home loan. Generally, the better your credit score, the more easily you'll qualify for preapproval. A better score usually makes the final underwriting process smoother, too, and you're more likely to qualify for favorable interest rates. Scores can vary quite a bit depending on what ratings system is used. Get ahead of the game and contact me for an accurate check-up on your credit health.
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Finding Your Dream Home
Once you've saved for your down payment and determined how much you can afford, it's time to start searching for a place to call home. Whether you're working with a real estate agent or house hunting on your own, it's smart to learn as much as you can about homes in your market. Research different neighborhoods and their price points, crime rates, and nearby schools to help narrow your search.
When you start touring homes, make sure the structural bones — like the layout, electrical system, and roof — are all in good shape, as these can be costly to repair or replace. Cosmetic changes to paint colors, cabinet hardware, or plumbing fixtures are much more affordable, so don't let décor choices derail your search or deter you from a good deal. For more information on transforming a fixer-upper into your forever home, contact me directly.
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Extending an Offer
When you've found the home for you, work with the seller or their realtor to put together an offer. This will include not only the price you're offering to pay for the home, but also any conditions or contingencies you may want to include. If you have your own real estate agent, he or she can help you create a competitive offer and assist with navigating negotiations and counteroffers.
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Making It Official
Once you and the seller have come to terms and your offer is accepted, the official home-buying process begins. The house will be taken off the market, and you'll be under contract for its purchase. Over the next 30 days or so, the closing company and the lender complete a detailed due-diligence process that includes inspections, appraisals, and title work.
During this time, it's imperative you don't make any changes to your financial situation. Any changes, even positive ones, can delay or nullify the closing process, so don't make any big purchases, take out any new loans or pay off any debts.
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Closing Time
When the due diligence is done, and no major issues have been found, you'll move into the final stage of the homebuying process: closing. During the closing, you'll sign a stack of documents certifying you accept the results of the home's appraisal and title search, among many other things. You'll also establish your home insurance policy and finalize the details of your mortgage loan. This can be daunting, but we've made it easy with our hybrid eClosing process. Contact me if you want to learn more about how hybrid eClosing makes the home-buying process smoother for you.
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Take Ownership
Now that you've purchased your house, your work as a homeowner begins. Homes need maintenance and constant care, so remember to set aside money to ensure you've got the funds available to protect your investment. With the right preparation, your dreams of becoming a homeowner can come true.
