Deciding to buy a home is one of the most significant decisions most people ever make. It’s also one of the main ways most Americans build their retirement savings. But unlike most other retirement investments, you get to build wealth while using your home every day.
What are the home purchasing steps involved in buying the right home — one that will be good for your financial health and be the perfect environment for you and your family?
The home buying process can indeed be lengthy, but the good news is there is help at every step of the way, from licensed loan officers to moving companies. We’ll look at the home purchasing steps homebuyers need to take to buy the best home for their families.
Get Ready
Before you begin shopping for houses, it’s essential to get a clear understanding of your finances. Your home is arguably the most expensive single purchase you make in your life, so it’s critical to know what you can comfortably afford.
Start by getting an accurate snapshot of your finances. List all your sources of income, including any from regular side hustles or part-time work. Next, list out your monthly expenses. This will help to give you a good idea of the monthly mortgage amount you can afford without too much demand on your finances. You can also use a mortgage calculator to help you get a more accurate estimate.
Credit Check
Unless you can afford to buy a house for cash, you’ll need to get a mortgage. Your credit history and FICO score can impact your mortgage eligibility, as well as the interest rate you can get. Online reporting agencies like Equifax, Experian, and TransUnion can give you a free copy of your credit report.
Carefully review your credit report for any outdated information, errors, or outstanding debts. If you notice any mistakes, look into whether you can take care of them before applying for your mortgage. The better your credit rating is, the better your chances of getting a mortgage with a great interest rate. Your licensed loan expert can help you review your mortgage options to ensure you get the best possible rate.
Mortgage Pre-Approval
Getting pre-approved for a home loan before you start looking for a home not only allows you to act fast if you see a home you love, but you’ll also know how much of a mortgage you’ll be eligible to receive.
Because pre-approval usually takes a couple of days to complete, if you wait to apply for a mortgage until after you find your dream home, another interested buyer who already has mortgage pre-approval could sweep in and scoop up your dream home. It’s also important to remember that many sellers won’t accept an offer on a house unless the interested buyer is pre-approved.
Find a Real Estate Agent
A real estate agent is a homebuyer’s best friend. Your real estate agent will help you find the best home for your family. Because they work for you, your real estate agent will look out for your best interest during all stages of the homebuying process.
Your agent will arrange virtual or in-person home tours, write up your offer to purchase any home you are interested in, as well as negotiate for the best price. And since your real estate agent takes their commission on the sale proceeds, there are no out-of-pocket expenses to you.
The Mortgage
Mortgages come in so many different shapes and sizes, and it’s important to get the right mortgage product for your situation.
Whether you’re a military service member or a veteran, looking to buy your first home, interested in low-interest-rate mortgages, looking for a low or no-down payment mortgage, or other options, there’s a mortgage out there for you.
This is where partnering with a licensed loan officer can really make a difference. Because they have a comprehensive understanding of the mortgage industry — and the different types of mortgages available — they can help you apply for the best mortgage for you and your family.
Look at Homes
Many home purchasing steps can feel like a chore, but looking at homes isn’t one of them. This is possibly one of the most fun parts of the entire home buying process.
As you look at each house, you can begin to imagine changes you could make to the setup that would improve it for your family. Start by checking out homes within your price range online, and narrow your selection to four or five for a single day. If you look at too many homes in a short period of time, it can be a struggle to remember the specifics of each one.
Home Inspection
A home inspection is one of the most valuable steps in the homebuying process. A trained home inspector will go over your potential new home from top to bottom in a home inspection. They’ll note any areas that might require fixing, like light switches that don’t turn on, cracks in the foundation, or outdated wiring.
Your home inspector will also highlight any areas of possible damage, such as previous flooding or missing roof shingles from extreme weather occurrences. This helps you to know whether the home you’re interested in is worth the money you have to spend and whether you can comfortably afford any necessary upgrades or other repairs. Your home inspection will let you know if your new home is safe for you and your family.
The Mortgage and Closing
You’re in the final stretch now.
At this time, ownership of the home is transferred to you, and you become the property’s new legal owner.
Now it’s time to take care of the final paperwork and sign off on your mortgage. In addition to your licensed loan officer and real estate agent, you’ll likely need a lawyer to assist with the paperwork. You’ll be given an official disclosure document outlining fees you will have to pay at closing, if any. (Some mortgages will allow you to roll closing costs into the total mortgage amount, so you don’t have to pay any out-of-pocket expenses at the closing.)
You’ll also sign the mortgage document at this stage, officially agreeing to repay the money lent to you to purchase the home.
Start Your Path to Buying a Home
Buying a home doesn’t have to be overwhelming. By taking your time and working with licensed loan officers, like the mortgage specialists at River City Mortgage, you can navigate the many house purchasing steps with ease.
If you’re ready to buy your next home, you can start the process online. If you have additional questions about the home buying process or wonder how much of a mortgage you will qualify for, get in touch today.
We can’t wait to go over the entire process with you from start to finish and help you decide which home loan product is right for you and your family.
