7 things to do when finding a home you want to buy
You’ve found a home you want to buy, what now?
The price matches your budget, and the house is structurally sound and close to town. But you worry about the home buying process. You’re not alone. Almost 45% of Americans felt nervous throughout the home buying process, and 40% said to buy a house was one of life’s most stressful events, according to Homes.com.
If you’ve found your dream home and are struggling to understand the buying process, look to an online marketplace like Credible. Credible can help you navigate the housing market and your mortgage options. When comparing mortgage lenders, it is important to check the loan rates. Click here to find your rate today to determine your loan amount, estimated monthly payments, etc.
What is the first thing to do when you want to buy a house?
Whether you are a first-time buyer or a seasoned pro, it is always wise to improve steps to buy a new home. Plus, you want to make sure that you choose a home that you can afford. So you will need a reasonable mortgage payment.
7 things to do after finding your dream home
While there are some hoops to go through, there are steps you can take to get closer to the fence in your price range.
- Check your credit score
- Obtain pre-approval letters
- Make a solid offer
- Secure your financing
- Get a home inspection
- Go for a final walkthrough
- Close your house
1. Check your credit score
Typically, your lender will determine the credit score needed to qualify for a home loan. However, the minimum score required also depends on the type of mortgage you are looking for. More than conventional loans, federal loans like VA and FHA have strict guidelines for eligibility.
You will also probably have need good credit to benefit from a mortgage. Your lender will review your bill payment history and your debt ratio (DTI), which should not exceed 43%. Your lender may also look at your gross monthly income to make sure you can afford all housing costs, including insurance, taxes, etc.
If you are confident in your credit score, calculate the numbers through Credible to see what types of mortgage offers are available to you. With Credible you can save money and time by comparing multiple mortgage options and loan rates at once.
2. Obtain pre-approval letters
To be fully confident, you will qualify for your dream home, get pre-approval letters, and have them on hand when you submit an offer. Pre-approval letters give you an edge over other buyers in a competitive market and strengthen your offer.
To simplify your life, visit an online mortgage broker like Credible to get personalized rates and pre-approval letters without affecting your credit score.
When calculating your budget, remember to include expenses such as homeowners and other insurance costs, down payments, set-up costs, closing costs, home inspection costs, fees. appraisal and attorney, appraisal and title fees, etc.
3. Make a solid offer
Even amid the COVID pandemic, the real estate market has maintained its resilience, as evidenced by strong home buying activity. But home inventories are low, and it’s not uncommon for a bidding war to break out for a home. Your real estate agent will help you make the best deal, whatever the conditions, taking your finances and overall budget into account.
The seller can accept your offer or your counter. You can accept the counter offer or submit a higher offer until you reach an agreement or decide to opt out. If you and the seller agree, you will likely need to make a down payment. This is when the transition goes into escrow, which can take up to 30 days.
4. Secure your financing
Even if you have been pre-approved, you will still need to officially apply for a loan. Your lender will work with your real estate agent to establish an appraisal. If the rating matches your offer, you’re good to go.
However, if the appraisal is low, your lender may not approve your full loan amount. If the appraisal is higher than your bid, you buy the home for less than market value, which immediately gives you equity in your new home. Don’t know what amount you’ll qualify for? Use an online mortgage calculator to determine potential monthly payments.
5. Have your home inspected
Your new home may look beautiful on the outside, but it’s what can be hidden that can cause problems down the line. That’s why inspecting your home is an essential part of your home buying process. Because the buyer pays for the inspection, some buyers waive the right to an inspection. But this is not the best idea.
Problems often encountered during an inspection that can cost thousands of dollars in repairs include traces of standing water, large cracks in the foundation, insufficient insulation, a roof in need of repair, and more.
6. Go for a final walkthrough
A day or two before closing, you may be allowed to take a final guided tour of your new home. During a walkthrough, you can see that everything has been cleaned and cleaned up, and all necessary repairs discovered during the inspection have been taken care of. Otherwise, notify your agent before closing. Then, visit Credible to connect with experienced loan officers and get answers to all your mortgage questions.
7. Closing your loan
Signing the documents to close your loan should only take a few hours. You will need an ID and a check or cashier’s check if closing costs are not included in the loan. Be sure to ask questions during this time to fully understand what you are signing. The documents may include the promissory note, closing statements, deed of trust and certificate of occupancy.
How long does it take to close my dream house?
In a 2018 report by Ellie Mae, the average close process takes around 40 days. It might sound like a long time, but when you consider that around 32% of all transactions experience some type of delay, it’s understandable.
Since most delays are due to financial issues, visit an online mortgage broker like Credible to get personalized rates and pre-approval letters, it’s logic.