8 Most Important Steps to Buying a House

0
77

Buying a House

When it comes to buying a new home there are many things that you need to know and keep up with even if you’re not a first-time home buyer. The process is similar and contains just about the same amount of pertinent information, which is a lot!

Buying a new house involves a lot of details that may feel overwhelming and stressful, but if you remember the main steps, buying your house can be more manageable. Here are the eight most important steps to buying a house.

Plan Ahead

When you are getting ready to buy a home, planning is key. Buying a home is not like making toast. There will be various moving parts, pertinent information, and important documents to monitor and keep track of. You will need to be prepared to maneuver in the housing market and establishing a plan can be instrumental in assuring a relatively smooth home-buying process.

Assess Your Finances

Check Your Credit History

So, how do you get prepared and plan ahead? First, you will want to check your credit history. It is important to understand your credit score and how can impact your eligibility for a mortgage and financing. The better (higher) your credit score the better rates you can get. 

If you have a low credit score or turbulent finances, it is best to plan well in advance so you can better situate yourself financially to buy your home. With a better understanding of your credit score and finances, you can discover what you qualify for, like a low downpayment. You can also take this time to audit your finances, checking for accuracy and errors.

Set a  Budget

Secondly, you can set a budget for your home and modify your current financial budget to achieve a better financial footing. Estimate how much you can afford or what you need to do in order to afford the home you want. 

You can look to financial professionals at this point, but this early on it’s better to have an understanding for yourself. You’re not signing papers yet, you just want to get a solid understanding of the numbers. You can use a mortgage affordability calculator to make your estimations. 

Decrease Your Debt

Thirdly, you will want to decrease any debt. Work on lowering your debt-to-income ratio (DTI). A DTI shows how much of your monthly gross income goes toward paying off debt. This is used by mortgage lenders to determine the size of house payments you can afford. Ideally, lenders look for a DTI ratio below 43% depending on the mortgage program.

If you’re going to buy a home, you don’t have to be debt-free, but you don’t want to be drowning in debt either. Pay off credit cards and loans. Save to make the initial down payment. If you do need assistance sorting out your finances, see what free resources are available to you.

Finally, try to get pre-qualified or pre-approved to get your home-buying process moving. This will provide lenders and agents with basic information on your financial position. When you are committed to your house hunt secure a pre-approval letter, as most realtors and sellers will only work with pre-approved buyers.

Hire a Real Estate Agent

Buying a home can be complicated and overwhelming. That’s why having a real estate agent can be helpful. They can look out for your interests, ask the right questions, and make an intimidating process feel like breeze.

Where the seller’s agent’s job is to advise and guide their client, your real estate agent’s job is to guide and advise you. Work with a real estate agent you can trust. As you decide who to go with, feel free to interview multiple agents. Do your due diligence and research agents.

You can find a good real estate agent by getting recommendations from friends, family, or even coworkers. Go over their reviews and portfolio. Most importantly, don’t make a decision without speaking to them in person.

Choose the Right Home for You

Sometimes you might feel pressured to buy due to time constraints, real estate advice, and financing, but at the end of the day, it’s important no matter what the restraints and requirements, that you choose the right home for you. It will be your home and you should choose the best fit for you.

Make an Offer

Your search has been long and far, but now you have found your home. What do you do? Make an offer! Making the right offer is important because you may be competing with other home buyers; so, you want to make the best offer, so the seller goes with you.

Use a comparative market analysis (usually done by the real estate agent) to base your offer. A comparative market analysis calculates the home’s market value using recent similar sales in the same area. This gives you a fair foundation to place your bid and leaves room to negotiate counter offers.

When you get ready to place your offer don’t forget to take into account the closing date, contingencies, disclosures, and earnest money.

Get a Home Inspections

The Zillow Group Report shows that eight-eight percent of home buyers inspect the homes they were buying. Why should you inspect your home before closing? Having your home inspected, whether by designating an inspection contingency or scheduling an inspection, is one of the best ways to make sure that the home you are buying does not have any underlying issues.

Depending on the results of the inspection, you may either be clear to move forward or have to revisit items that came up in the inspection with the seller’s agent.

Get Your Home Appraised

You know what you’re getting your new home for, but it’s important to conduct a home appraisal to document the current value of the home property. This is necessary to secure your mortgage loan.

Finalize and Close

Once you have secured financing, settled on contingencies, and met any items needed from the home inspection, you are set to start finalizing your home buying process. Conduct a final walkthrough to make sure everything is set and you are happy with your decision. Close on your new home by signing all of the required documents and get ready to move in!

LEAVE A REPLY

Please enter your comment!
Please enter your name here