For many people, the process of buying a home can seem very intimidating. This is not always the case. The process is fluid and different for everyone, but following these steps can ease the nervousness that comes with buying a home…
Know your budget
It is highly important for you to set a budget. There are several “Rules of Thumb” to home buying. Some advise spending an amount 3-4 times your annual salary. If you can afford a larger down payment, your house can become more than 5 times your annual salary. Everyone’s budget is different, it’s just important you find a budget that works for you.
Your credit score is incredibly vital for the home buying process. The three-digit number determines whether or not you’ll be able to secure a loan. Once you’ve verified your credit score, you can aim for the right loan and lender.
Compile all necessary documentation
In order to be pre-approved for a home loan, (SPOILER ALERT) which is the next step to the home buying process, you need to compile all necessary documentation. This includes:
bank account statements
W-2s from the previous two years
statements from current loans and credit lines
names and addresses of landlords for the previous two years
Find lenders and get pre-approved for home loan
Becoming pre-approved for a home loan will set a definite budget for your future home. Having a set number for a home allows for a much easier home buying process. It also allows for you to operate with the knowledge that you will be approved for a loan.
Find dependable realtors
Realtors and Real Estate Agents have access to helpful information that the general public does not. They also possess a unique skill set. The right realtor will have good negotiation skills, familiarity with your desired area, and expertise in the home buying process. Purchasing a home is made infinitely easier with a dependable, trustworthy realtor.
Look for the right home
Once you’ve completed the above steps, you can find a home in your price range. Before you start your search, jot down everything you want in a home. This will be the biggest investment of your life, you better make sure you absolutely love the home you are purchasing!
Choose the right mortgage
There is a wide variety of home loans and loan programs available for home buyers. Understanding the differences in these loans and programs is extremely important. Check into as many loans and mortgages as possible; finding the correct loan for you will make the process of paying for the home much less of a headache.
Ascertain total monthly housing costs
You must determine the real total monthly housing costs - including taxes and homeowner insurance.
Schedule home inspection
Having your future home inspected is important for several reasons. Most importantly, you want to make sure the home is in good living condition. If not, the home inspection will reveal this and will allow for you to renegotiate your offer on the house.
Have the home appraised
An appraiser from a third party will let all parties involved know that the home is fairly priced.
Figure closing costs
Now that you’ve had the home inspected and appraised, the closing costs can be determined. Your realtor will help you fairly negotiate with the seller.
Arrange for title company to handle paperwork
The amount of paperwork that goes into buying a home is rather large. A title company can sift through the paperwork and allow for the closing of the home to transpire smoothly.
If you feel you are ready to complete the process of buying a home, Home Loan IQ will find a lender perfectly suited for you. We use your real data and search thousands of banks for the lender that will work best for you!