House buying can be so complicated and stressful. However, this step-by-step guide can assist you and make you understand the home buying process and guide you to successfully buying your own home without any problems.
1. Get Your Finance in Order
A credit report is an ongoing record on your finance management. You need to know what your credit report says about your financial history before you try to apply for a mortgage. This is because it plays a major role in the mortgage approval process and determining the rate of interest and other loan terms that lenders may offer you.
2. Find a lender
The next step offers you 2 choices: getting pre-approved or pre-qualified.
Pre-qualifying is the estimation of a lender of what you can afford based on your credit, debt, and income. Preapproval, on the other hand, is a firmer number since the lender will pull your credit, analyzed your tax return and checked your debt-to-income ratio.
It may be a lot of work, however, it allows you to stand out as a serious buyer since you have taken additional steps and locked in a specific interest rate.
So, find a lender that you can trust since you will be working for them for a little while and will be the one handling your transactions.
3. Work with Real Estate Agents
An agent will help you navigate through reviewing property data, condo documents, floor plans, easements, and other property details. They also help provide market information as well as managing and interpreting the information you obtain online.
4. House Searchin
Next, you will need to start looking for homes in your price range. You will see a lot of property, so make sure that you take notes or pictures and videos to help you remember them all. Make sure that you check every detail of the houses you visit as well as the neighborhood.
Take as much time as you need in finding your home, then work with your agent to negotiate a fair offer. Once you and your seller have reached an agreement on the price, the property will go into escrow, the period of time it takes in order to complete all the remaining steps.
5. Home Inspection
In general, home inspection happens within 8 days after an agreement. This process is to check for signs of damage on structures or things that may need to be fixed.. Your agent typically helps arrange an inspection. This contingency will help protect you by giving you the chance to withdraw or re-negotiate your offer if the inspection shows that there is significant damage to the property.
Both you and the seller will have a report on the inspections finc=dings and it is up to you if you need to ask the seller to fix anything before you completely close the sale.
Your lender will arrange for an appraiser in order to provide an independent estimate of the value of the home that you will buy. Based on certain factors such as structural conditions, location, and recent sales of similar properties, the appraiser will look through the property in order to find anything which may alter its value.
After that, the appraiser will then provide a report to your lender and show it to all parties involved.
7. Coordinate the Paperwork
Buying a house has a lot of paperwork. Your lender will be the one to arrange for a title company in order to handle all of these and ensure that the seller is the rightful owner of the house that will buy.
8. Closing the Sale
You will sign all the necessary paperwork in order to complete the purchase as well as your loan documents. Typically, it takes just a couple of days for your loan to be funded after all the paperwork is returned to your lender. And once the seller received the check, you can now move into your new home!