So you want to buy a house? Whether you are a first-time homebuyer, a veteran home shopper, or anything in between being prepared makes the home buying experience much easier. This means getting into the nitty-gritty even before you start shopping for a home.
Step 1: Get your finances in order
Check your credit score, and ensure that your credit snapshot displays an accurate financial picture. Many banks will view this to analyze your creditworthiness. In light of recent COVID-19 events, banks may have even stricter guidelines for lending. If you do not meet minimum thresholds, you may incur higher rates or may not even qualify for a loan. Research and speak with mortgage brokers to help you understand the prequalification processes and eligibility requirements.
Step 2: Set your budget
Once you know that you can get a loan, meet and research mortgage brokers to get a better picture and approximate mortgage payments. Based on your conversations you can set a spending limit that you are comfortable with.
Step 3: Decide what kind of home you want
Are you looking to expanding your home to accommodate your growing household, downsize, or move from or to the city? The demand for the housing market does not seem to be slowing down anytime soon so making a list of your needs and must-haves for your new home will help you and your real estate agent focus on properties that are a fit.
Step 4: Give your Landlord notice
While this may seem like a no-brainer, buying a new home is expensive, and you do not want to be stuck paying for your rental and new home at the same time, so be sure to plan accordingly. If you are not at your lease end, you will need to communicate with your landlord to see if it is possible and what the terms would be to break your lease early.
Step 5: Hire the right real estate agent
Real estate agents are educated to help you through a stressful home buying process. They can help you find a home that meets your standards and budget. If you are not sure where to start to find an agent you can ask friends or family, and you can reach out to concierge services like SetSchedule that will help pair you with the top-rated agents in your area.
Step 6: House Hunting
The first rule of thumb to house hunting is that more will come. If an offer is rejected or if you lose out on that house, know that more homes will come your way. While the market is a little different in the pandemic, and some areas are more competitive than others, you will find your home. It is just a matter of time.
Step 7: Make an offer
Once you find a property that suits you, the market may dictate immediate action is necessary to obtain the property, so make an offer. Some offers will be accepted or rejected. Other times may receive a counteroffer or a request for your best and final offer. While negotiations can be scary, know that you are in control, and it is up to you if you want to move forward with the next steps. If accepted or you communicate mutually agreeable terms, you will be required to provide an earnest money deposit as a show of good faith.
Step 8: Do your due diligence
When an offer is accepted, you should still learn more about the home through reportings, appraisals, and inspections. This will give you a solid understanding of the home and its required upkeep. After all, you do not want to put your hard-earned money into a property that you will not be able to afford to live in due to repairs.
Step 9: Get final loan approval
While you may have obtained a preapproval from a banking institution early on, you will need to go through the underwriting process before you can be funded. During this process, you may be asked for additional paperwork like bank statements, tax statements, or pay stubs. You will want to make sure to respond quickly to ensure the timely execution of your loan.
Step 10 - Sign those papers!
You are in the home stretch, You have put in the work, and now it is time to sign the papers and reap the rewards! This is the time that you can expect to pay the fees associated with closing, get the house key, and sign a ton of paperwork. Once complete, your paperwork will be recorded and it will be official! The house is yours! Congrats homeowner!
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