Whether you’re in the process of buying your first home or have done this before, it’s always an incredibly exciting time. With a little care and planning, buying a property can be a fun and rewarding experience. Here are the 10 steps that will take you from dreaming about a new home to holding the keys in your hand!
Step One: Get Pre-Approved for a Mortgage
It may seem early in the process to think about financing a property you haven’t chosen yet, but getting pre-approved from the start can help make your purchase successful. Your Mortgage Loan Officer will ask you about your plans for the house, your finances, your immigration status, and your employment, and will determine the loan amount you’re pre-approved for, as well as the loan programs that may be suitable for your situation.
Ready to get pre-approved? Call us to speak with one of our mortgage experts!
Step Two: Set Your Budget and Wish List
Once you know how much you’re pre-approved for, it’s time to determine how much you’re comfortable spending on your new home. Consider the amount needed for a down payment, if applicable. (Programs with little or no down payment can help reduce your initial costs). Think about your monthly expenses such as the mortgage payment, property taxes, and insurance. Review your existing expenses and consider saving for emergencies, long-term savings, and other financial goals you may have. When buying a home, it’s also important to plan for maintenance and repair costs.
This is also a good time to create a wish list for your new home. What features are most important to you, and which are “nice-to-haves”? Think about location, square footage, architectural style, the number of bedrooms, floors, yard, and any other important factors. You may not find a property that has everything on your list but identifying what matters most will be helpful when it’s time to decide which properties to see.
Step Three: Find a Real Estate Agent
Working with an experienced real estate agent can help make the process smoother. They will be your advocate every step of the way, negotiating prices and terms that are favorable to you. They can highlight potential features that may be “red flags” — remember, what looks good isn’t always the best. In the end, they’re the right person to identify homes that are great opportunities and those that may be overpriced.
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Step Four: Review Real Estate Listings
This is the fun part! Your real estate agent will likely provide you with some listings to review based on what you expect to find in your new home, and you can also look for homes available for sale. It can be helpful to look at properties that are a bit outside your parameters; you might find a great opportunity that’s slightly below your price range or a dream home in a nearby neighborhood you’re considering.
When you find several homes that interest you, your real estate agent can arrange showings so you can tour the homes in person. Take notes on each property to help you remember what you loved and didn’t love about them.
Step Five: Make an Offer
It could be the first house you see or the tenth, but when you find a property that fits your budget, has many of the features on your wish list, and simply feels right, it’s time to make an offer! Your real estate agent will guide you through the decision of price and terms for your offer and present it to the seller’s agent. Again, to stand out from the crowd, include your pre-approval letter, as it strengthens your position and gives the seller confidence that you won’t have trouble getting to finance for the purchase.
Step Six: Apply for a Mortgage
Once your offer has been accepted and you’re under contract on the property, you can move forward with your formal mortgage application. This is where we come in — your allies in organizing every document and guiding you to find the loan that best fits your situation, whether it’s an FHA, VA, Conventional, or Non-QM loan. Remember, if you have an ITIN, you’ll also be able to apply, even with low down payments.
Much of the information will have been gathered during the pre-approval process, but you’ll be asked to provide additional information and documentation to complete the full application.
Ready to apply for a mortgage? Contact us to get started!
Step Seven: Arrange for Home Insurance
To protect your investment in your new home, it’s important to have home insurance coverage. Depending on your location, you may also need or want additional coverage such as flood, wind and hail, landslide, or earthquake insurance.
Step Eight: Get the Home Appraised and Inspected
To help ensure that your home is worth what you’re paying for and is in the expected condition, it’s customary to have the home appraised by professionals (this is the famous inspection). A residential real estate appraiser will evaluate the property and, based on comparisons with other similar homes recently sold nearby, will determine its current market value. A home inspector will thoroughly investigate the home, looking at the structure, appliances, electrical, plumbing, and HVAC systems, among others. You’ll receive a report detailing any items that need maintenance or repair. If significant work is needed on the property, your real estate agent can negotiate with the seller to see if they’re willing to cover part or all the costs.
Step Nine: The Final Walkthrough
Often done the morning of the closing, the final walkthrough is your chance to take one last look at the house before it becomes yours. You and your real estate agent will tour the property and make sure everything is in order and that any agreed-upon repairs have been completed. Then, it’s time to head closing!
Step Ten: Close the Deal on Your New Home!
This is the most exciting day of the home-buying process, for you and everyone involved. Closing is where everything becomes official. You and the sellers will sign several documents, completing the transaction and the sale of the property. After the paperwork is finished, the funds are transferred, and the deed is recorded, you’ll be the official owner of your new home!
By following these steps, you’ll enjoy a well-organized and successful home-buying experience, ensuring that your new home meets your needs and expectations. Good luck with your home-buying adventure!
