Buying a home can be a grueling process. But, with good planning, it can be less stressful. Let’s take a look at the 11 steps of the home buying process.
Step 1: Prepare your finances
Here are some tips for preparing your finances ahead of the home buying process:
Once you have your finances worked out, you can start shopping for a mortgage.
Step 2: Choose a lender
You can choose to take out a home loan through a financial institution or a private lender. When researching potential lenders, read online reviews and look for lenders that offer excellent service experiences, reasonable closing costs, and fees, transparency, and favorable rates.
Step 3: Get preapproved for a mortgage
Once you’ve chosen your mortgage lender, you can apply for a pre-approval on your loan.
The lender will ask for your financial history and other personal information. If all is satisfactory, the lender will begin putting together the details of your loan.
When they have determined how large a loan you are eligible for, they will grant you a preapproval letter.
Step 4: Find a real estate agent
A real estate agent can help you find the perfect home that fits your budget and preferences. They have access to a broad range of homes on the market and can negotiate on your behalf.
Step 5: Find your dream home
Once you have pre-approval and a real estate agent, it’s time to start shopping for homes. Be sure to know what you want, be prepared to negotiate, and beware of potential red flags as you search.
Step 6: Make an offer
If your offer is accepted, the deal will officially be “under contract.” At this point, you’ll likely need to pay “earnest money” or a portion of the down payment.
Home sales are typically under contract for 4-8 weeks, though this can vary.
Step 7: Get your mortgage
As soon as your offer has been accepted, your mortgage lender will get to work on the final details of your loan.
Step 8: Schedule a home inspection
A professional home inspection will reveal any potential issues that you may not have noticed.
Step 9: Obtain homeowner’s insurance
Shop around for the best rates and coverage to make sure you have a policy in place before the closing.
Step 10: Schedule an appraisal
The home appraisal, which determines the actual value of the home, assures the lender that the loan details fit within their policies and regulations.
Step 11: Close and move in
Congrats – you’ve made it to the closing! Set aside several hours for the closing and come prepared with the funds you need to cover the remaining closing costs.
Best of luck in your new home, sweet home!