Buying a home can seem like a daunting task, but it doesn't have to be if you know what to expect. Help ease your stress by getting prepared for the road ahead. There are several steps to buying a home, but we have compiled a checklist to get you to the finish line.
1. Come Up With a Budget
First, sit down and add up your combined household income. Make a list of all your monthly expenses, including but not limited to, your monthly debt such as credit card payments, car payments, and student loan payments. Estimate additional expenses like groceries and gas. Lenders won't include these items in their calculations, but it will help to ensure you can afford all of your monthly expenses. your lender will also estimate your loan fees and closing costs.
2. Get Pre-qualified
Choose a lender and get pre-qualified. A pre-qualification is when the lender verbally collects information, such as income, assets and debts, reviews your credit report, and estimates your maximum monthly house payment. Having a pre-qualification letter means you're a serious buyer and may give you the edge over other buyers. If you are ready to get pre-qualified click here.
3. Hire a Real Estate Agent
You shop around for the best deals on cars or groceries, so why not shop around for your real estate agent? Speak to a few agents and hire someone you feel confident about. Get referrals from friends or family and search for online reviews. Make sure they are licensed in the state you are buying in. Agents will also be able to provide you with more listings than those found online. Realtors are on your side when it comes to buying a home, and their commission comes from the sale of the home so you don't pay a fee out of pocket.
4. House Hunt
Now that you have an agent and you're pre-qualified, it's time to house hunt. Discuss your needs and wants in a home with your agent. Check out the neighborhoods, communities, and school districts when looking for your home. Keep your price range in mind; you don't want to spread yourself too thin by going over budget. Remember what items are most important in your new home.
5. Make an Offer
Now that you've found the perfect house, it's time to make an offer. Your agent will likely review comparable homes and advise you to make the appropriate offer. Sometimes the seller will counteroffer, at which point you will them have the option of accepting their offer, countering again, or walking away from the home. In any case, your agent will be there to help you through the process and will ensure your loan officer is updated on all aspects of the process.
6. Offer Accepted
Once your offer is accepted, you will enter into a contract. At this point, you may need to get an appraisal and home inspection. The appraiser will focus on the value of the home, but the inspector will dive in a bit deeper. An inspection will hone in on the conditions of your home. Getting the home inspected is important because if there are any issues or problems with the home, you can request the seller to correct the problem.
After you've been approved for the loan and the home is appraised and inspected to your satisfaction, you can schedule a closing. Closing will be scheduled at a time that's convenient for you. You will meet with your realtor and oftentimes, a notary. During this time, you will review your contract and the terms of your loan. If everything is found satisfactory, you will complete all the documents by signing.
Once all the paperwork has been signed, you can celebrate homeownership! Whether you are moving in right away or taking your time, schedule a time for your utilities to be set up. Owning a home is a huge accomplishment. Don't forget to take a moment to celebrate. After all, you deserve it!