Buying a home can feel overwhelming because it’s one of the biggest investments most people make in their lifetime. Many people struggle with knowing if they are ready to buy a home or not. Prepare yourself by learning the steps to the home buying process to make things less stressful.
💯 Know Your Credit Score
Two of the most important aspects of buying a home are knowing and understanding your credit score. While these are not the only factors in determining your eligibility when applying for a loan, they are important to the lender. The maximum credit score available is 850, though this is very uncommon. Many first-time buyer programs and down payment assistance programs available require a credit score of at least 620.
Obtaining your score can be done easily due to the Consumer Credit Report Act that allows you to order a free report once a year from each agency. Equifax, TransUnion, and Experian are the main reporting agencies in the nation. In some cases, credit clean-up can be accomplished and ultimately the credit score improved by reviewing your full credit report. Items that are believed to be in the report in error can be removed by contacting the credit bureaus in writing and having them investigate. If it is determined that the item is old enough to be removed or on the report erroneously, it will be removed.
💰 The Importance of Saving Money
When it comes to getting ahead of the game in home buying, saving is very important. Having 20% of the purchase price of a home set aside before you find the home and apply for a loan is a major time saver. There are down payment assistant programs available to qualified applicants; however, saving as much as you can go far to get the home you want and a loan that fits your budget. Individuals that can save a few months of mortgage payments as well are also more likely to be successful as homeowners.
👤 Find the Right Real Estate Agent
Reducing the stress of home buying is more easily accomplished by selecting a qualified real estate agent to assist you. A good real estate agent can relieve a great deal of the back and forth as well as assist in locating the home that fits your criteria. The first meeting with an agent or broker should be much like an interview while you determine if he or she meets your needs. An agent that appears to understand what you need, knows the local market well and is quick to provide options, could be the right person for the job. Be prepared with a list of items that you want and need for your new home and see what the agent comes up with. The agent should be able to explain the process to you. They should always alert you to any new information, even if they believe it is not something you wish to take advantage of.
✍️ Get Pre-Approved for a Home Mortgage Loan
Get pre-approved for a home mortgage loan before starting your home search. This provides you with a solid number that you can shoot for and it helps to avoid falling in love with a home that is out of your price range. Additionally, making an offer on a home is much more impressive to the home-owner if you have a pre-approval. This can work to your advantage in a competitive buying market. Sit down with a mortgage broker and go over the numbers. Make sure you have a pre-approval and commitment letter, not just a pre-qualification. A pre-qualification is not a lender committing to lend the money.
💵 Placing the Right Offer
Perhaps one of the most crucial steps in buying a home is putting in the right offer. This doesn’t mean that you must make an offer above the asking price. It does mean that you need to make sure you are competitive in the offer while still protecting yourself with contingencies such as requiring passable inspections. Make a fair offer if you want the property. Your real estate agent will play a vital role in this part of the home buying process. They will help you place an attractive offer to the seller and be there to negotiate if your first offer is not accepted.
📝 What Happens After Offer is Accepted
Once the offer (Contract to Purchase) is accepted by the Seller, it is time to move toward signing a Purchase & Sale Agreement. This agreement states that you are ready to purchase the property and lays out all the contingencies such as dates by which you must provide financing (if you have not already done so), dates for inspections and date of closing. You may also be required to provide an additional deposit at the time of signing the Purchase & Sale Agreement. Depending on the state that you are in and the situation, you may want to start forwarding all the documents to your attorney for review at this point. You and your real estate agent, attorney and mortgage broker will work as a team to cross of items from the checklist moving toward closing. The closing agent or attorney will ask that you provide certain items such as your social security number, mortgage information and the like. In the meantime, they will work to give gather information for the closing. Typical timelines vary, but traditionally you can close on the property 30-60 days after the Purchase & Sale Agreement is signed by both parties.
Your real estate agent is the best source of information about the local community and real estate topics. Give Brian Birkel a call today at 402-706-7532 to learn more about local areas, discuss selling a house, or tour available homes for sale.