The Home Buying Process Can Be Confusing
The home buying process can be daunting. A home is the most expensive purchase the majority of families will ever make. Some believe you are not truly an adult until you take on that responsibility. For the majority of us, it is still a part of the American Dream.
Without a doubt, purchasing a home is complicated. Even for repeat buyers, it can be stressful. But not to worry. We can help.
Let’s simplify the home buying process by breaking it down into eight essential parts. Consider it a foundation for all that comes next as you travel the path to home ownership.
Arm Yourself with Information – The First Step
There are millions of words written in the home buying process on the internet, and most of it is free. Knowledge will increase your confidence in making decisions which are best for you and your family when you buy a home. Here is an excellent place to start your quest.
Step 2 – How Much Home Can help I Afford
When you want to get a mortgage one of the most important considerations is your Debt to Income Ratio. Simply explained that is looking at how much you have to pay out for housing and credit debt each month compared to the amount of money you earn. An online tool can calculate your DTI. That number should be between 35% to 44% to obtain financing.
Step 3 – Get Pre-Approved for a Mortage
It’s time to visit a lender because you must learn if you can get an approved for a mortgage and at what amount. The home buying process today is competitive, and without a pre-approval, no agent or seller will take any offer you make seriously. Before scheduling an appointment, check your credit score to avoid unpleasant surprises. If it is below 620, it will be a challenge. Also, bring along two months records of your credit debt, your checking and savings account statements, your last two salary stubs and the previous two years of your federal tax returns.
Step 4 – Find a Fantastic Agent
Do not approach buying a home as a DIY project. Get an agent to represent you, and it will make the rest of the process that much more relaxed and fun. Search online for someone with experience, great reviews, and knowledge of the market where you plan to buy. Going to open houses is also an excellent way to meet and evaluate. Make sure you are comfortable with the agent you select because the process of buying a home can be a long one.
Step 5 – The Fun of Searching for a Home Begins
The quest is the part of the home buying process I like best. Starting your search on the internet is a good plan. You can narrow things down by community, price, bedrooms, and a host of other options to pinpoint the best match for you. When you see a house that looks good, don’t hesitate. Call your agent and schedule a showing.
Step 6 – Make an Offer
When you find the one, your agent will help you write up a Purchase Offer. When you and the sellers agree on a price, you are on your way!
Step 7 – Schedule a Home Inspection
The home buying process would not be complete without a professional inspection. You should never skip this step, even if you are buying a new home. Once you know the condition of the property you are buying is acceptable, you can let your lender know you have an agreement to purchase completed and signed by all parties.
Step 8 – Completing the Final Loan Application
The lender will now step in and get you to the finish line. There will need to be an appraisal, and then your application will go to underwriting where the loan approval happens, and the closing date confirmed.
Step 9 – Attend the Closing
This is where you complete the process. You bring your money to the table for the down payment and closing costs, sign lots of papers, and get the keys to your new kingdom.
You did it! Congratulations on navigating the home buying process like a pro. Start unpacking!