Taking the time to research what lies down the road ahead can save you stress, and money, during the home buying process. Whether it is your first time purchasing a home, or you’re a veteran home buyer just needing a refresher course, learning what to expect will help you achieve a successful transaction. Here are the six steps to buying a home to get you started:
Step 1 – Check Credit
Your credit history is the first piece of information that potential mortgage lenders will examine to determine your eligibility as a buyer. To make sure that your report is showing your best financial state, you will want to check it over for errors before heading to see a lender. Report errors to the agency and allow some time for it to update on your report. While waiting for reporting agencies to correct errors, take the time to settle any delinquent accounts. Making sure your credit report is accurate and free of adverse reports significantly increases your odds of receiving a home loan that matches your repayment abilities. The Fair Credit Reporting Act allows you to obtain a copy of your credit report at no charge from the top three reporting agencies once a year, so there is no excuse to avoid checking your credit history before you contact a lender.
Step 2 – Save Money
While paying for the entire purchase price of your new home in cash is an option, most buyers decide to use a home mortgage loan instead. But, this home mortgage loan will not cover all the expenses that come along with becoming a home owner. Some home mortgage loans require you to pay cash out of pocket for a down payment (around 20-percent of the home’s purchase price). You’ll also want to be financially prepared to cover closing costs (typically between 2 to 8 percent of the purchase price) if not covered by the home’s seller in your purchase agreement. In addition to those major expenses, you’ll have a lot of little things to be responsible for that add up over time. Moving expenses, upgrades, and inspections are all expenses you want to have some extra cash.
Step 3 – Find a Real Estate Agent
Buying a home can be a scary endeavor. Thankfully, you don’t have to tread those waters alone. Finding an experienced, knowledgeable and skilled real estate agent will be the key to successfully purchasing a home with the least amount of stress and delay. Learn about the different technology, resources, and communication you can expect your agent to use to help with your home search. Research their track record with other buyers before choosing which agent you’d like to work with to ensure the best fit for your needs.
Step 4 – Apply for Home Mortgage Pre-Approval
A home purchase is one of the biggest financial investments you will make in your lifetime. Knowing how much house you can afford is important before you start looking at potential properties. You want to avoid falling in love with a home only to find out that it falls outside of your budget down the road. Getting a home mortgage pre-approval takes all the guess work out of knowing what you can afford, as it sets your target price range for you. Your pre-approval tells sellers that you are ready to follow through and complete the process once you make an offer on a home.
Step 5 – Place an Offer
Once you’ve found the home of your dreams, it’s time to make an offer. Your real estate agent will have valuable wisdom when it comes to choosing the right offer amount. Sometimes a seller’s asking price is above what similar homes in the market are selling for, and that could mean offering a lower amount is the right choice. Other times you may have to offer well above an asking price if a home is under-priced in a hot neighborhood to avoid being outbid by another buyer. Listen to the advice of your agent and rely on their skills and experience to provide you with the best result.
Step 6 – Closing Time
Once your offer is accepted, you’re in the final stretch to becoming a home owner. Your lender will order inspections and an appraisal. The lender orders a title search. There will be some final pieces of paperwork that your real estate agent can quickly guide you through. Once closing day arrives, you’ll pay any fees and closing costs that you’re responsible for and finally receive the keys to your new home.
Your real estate agent is the best source of information about the local community and real estate topics. Give Candy Vaughn a call today at 615-778-1818 to learn more about local areas, discuss selling a house, or tour available homes for sale.