Buying a home is a big decision that should never be taken lightly. The process takes time and can be frustrating. You will see that in the end, it is worth the time and effort. However, before you embark on the home-buying journey, there are six steps you should consider.
💯 Know Your Credit Score
Your credit score matters. Lenders are going to look at your credit score to determine your creditworthiness. It will give them an idea of how financially responsible you are. If your score is high, you will get favorable loan terms, such as a lower interest rate. However, the lower your score is, the higher the risk is in lending money to you. This will result in higher interest rates and possibly a larger down payment. These are two things you want to avoid if possible. Knowing your credit score will allow you to know where you stand when you apply for your mortgage loan.
💰 The Importance of Saving Money
The importance of saving money before buying a home cannot be stressed enough. Buying a home requires you to pay out-of-pocket expenses. You are going to need money for a down payment, if a down payment is required. You will have to pay for third-party services, such as a home inspection, appraisal and lender fees. There are also closing costs that will need to be paid the day you close on your home. If you don’t have the cash available for such expenses that are required up-front, then the home-buying process will be delayed or worse, you will be prevented from moving forward altogether.
🙋♂️ Find the Right Real Estate Agent
The real estate agent you choose is going to work with you from start to finish. They will be there to show you homes and be on the lookout for anything that might interest you. Your agent will help you negotiate a deal once you find a home that suits your needs. Basically, your agent is your go-to person for all things related to the home-buying process. They are a key component in making sure the process goes smoothly and is successfully completed. Considering this, you want to choose someone who has a good reputation and has significant real estate experience.
✔️ Get Pre-Approved for a Home Mortgage Loan
Before you start home shopping, you must get pre-approved for a home mortgage loan. The last thing you want to do is waste your time and your agent’s time looking at homes that you can’t afford. The pre-approval process will tell you just how much you can borrow. By taking this wise step, you will avoid the heartache and disappointment of falling in love with a home that is out of your price range. You can start the search right by searching for homes that are within your pre-approval amount.
💵 Placing the Right Offer
Your real estate agent will prove to be an asset when placing your offer. They will help you formulate an offer that is competitive with other buyers’ offers and that will be attractive to the seller. Because you are making an offer, it will be less than the asking price. You want to make an offer that is fair, but still appealing to the seller. If your offer is too low, the seller will simply move on to a better offer and you could lose the deal. If this is your dream home, you want to avoid that.
📝 What Happens After Offer is Accepted
Once you’ve been informed that you are the lucky buyer and the seller has accepted your offer, you probably wonder what happens next. Once your offer is accepted, the seller’s attorney will draft a purchase agreement and send to your attorney for review. If everyone agrees with the purchase agreement, you will schedule a home inspection. If there are issues with the inspection, you can ask the seller to correct such issues. If the home inspection finds no problems, you will then be required by your lender to have an appraisal of the home. If the home doesn’t appraise for at least the selling price, you will have to go back to negotiating. If, however, the home does appraise, the next step is the closing.
Although buying a home isn’t always smooth sailing, it is a rewarding process that is worth the time and energy you put into it. Once you close on your new home, you’ll be a satisfied new homeowner and can begin making the home your very own.