The process of buying a new home is exciting, but there are many steps that are involved for the transaction. I have prepared a list below for you to follow so that you can be best prepared as you begin.
Step 1: Start The Research
Start your research of areas that you are most interested in and make note of the homes and price points that are currently in the market. This will give you an idea of what neighborhoods might be best for you to consider.
Step 2: Define Your Budget
Consider your budget, debt and amount of funds you have available for a down payment and what you feel comfortable paying on a monthly basis. A lender will still have to qualify you for a home loan, but you should make this determination based on your own level of comfort as well given your lifestyle.
Step 3: Get Prequalified
The best way to go about determining your budget is to get prequalified for a mortgage. To get prequalified, you will need to consult with a reputable mortgage broker and provide some of your personal information and details. Your lender will then tell you how much you will be approved for which will determine what price range of homes you can begin searching for. It is important to provide accurate information for the pre-approval as you will have to eventually follow up with supporting documents, credit reports, etc. to verify your financial status.
Step 4: Searching for Homes and Making an Offer
Once you begin touring the homes in your price range, be sure to take notes as you may see many houses. When you visit homes in different neighborhoods, consider things like convenience to local services, your work commute and other things that speak to your lifestyle. Once you find the home of interest, submit your offer with your prequalification letter.
Step 5: Home Inspection
A home inspection is a milestone event as it can search for signs of structural damage or items that may need substantial repair. Offers are most often made contingent of a satisfactory home inspection to protect the buyer. Any negotiated items that shall be resolved by the seller can be confirmed before the closing at the walk-through.
Step 6: Home Appraisal
Your lender will arrange for the home to have an appraisal of the home. The appraiser will be from a third party company that is not directly connected so there is not a conflict of interest. The appraisal will verify to all parties that the price you are paying is a fair market price for the home.
Step 7: Complete the Necessary Paperwork
Your mortgage lender will order a title company to review documents and ensure that the seller is the rightful owner of the house. Additionally, you will need to complete your loan package by providing your lender with all supporting documents that back your employment and financial status.
Step 8: The Closing
After your final walk-through of the property, you will move to the closing. At the closing you will sign all legal documents to complete the purchase including your loan paperwork. Once this is complete and the funds are delivered to the seller, you are ready to move into your new home!