The first time you do anything is always the scariest – buying a home is no different. There are no secrets to the process that you need to go through to get a home. {Even for people who have not yet been through the homebuying process, there are really no secrets to the process of buying a home}. It is a big deal, and no one will blame you if you are nervous but try to focus on being excited.
Get Pre Approved – Get Pre Qualified
First, you will want to get a copy of your credit report – even if you have to pay for it. Be sure to take the time to review your report so you know if there is anything inaccurate on it. Here are the things that you will need to get pre-qualified or pre-approved:
- Gather your financial information – 30 days of pay stubs, 2 months of bank statements, last quarterly IRA and 401K statements, last year’s W2’s.
- Research Loan Programs, FHA Home Loan Options, First Time Home Buyer Programs
- Find a Mortgage Company or Lender to work with – list of questions to ask Loan Officer
- With your lender, determine the price range of homes that you qualify for. You will need your credit report and your financial information to complete this.
- Determine how much you think you want to spend each month on your mortgage payment.
Shop For A Home To Buy – Find a Realtor
Step number one is to find a Realtor and you can easily find one online.
Start your home search based on the price range you qualify for, and the location and home features that you want. The agent should set you up on some sort of automated email system that will send you new listings every day. Another place to look is PropertyNut.com.
Ask the Real Estate Agent for a sample contract for you to read and ask questions about. You want to have an understanding of what’s in the contract before you write the real one.
After you have worked with your real estate agent to pick out some homes you would like to see, then it is time to go look at each one. Take notes about each home you visit. Trust us on this; you won’t remember the specifics otherwise once you visited more than about 5 homes.
When done looking at homes – you’ll know when this is as you will have some homes that you want to revisit – schedule time to take second looks. This time take more detailed notes. Important characteristics in a home to consider.
If you find a home that you want to purchase, let your agent know and sit down with your agent to write up a sales contract offer.
If your offer is accepted, your agent can help you make sure that appropriate inspections are scheduled and completed.
Get Loan Approval From Mortgage Lender
Now is the time to make sure that you are pre-approved with your lender and not just pre-qualified. If you haven’t already, provide your loan officer with 30 days worth of pay stubs, your last two months of bank statements, your last quarterly statements from your IRA/401K’s if applicable, W2’s, maybe your tax returns, and any other information your loan officer might ask for.
Purchase Home Owners Insurance Policy
After working with the loan officer, now it is time to work with the insurance company to find the right homeowner insurance policy for you home. The effective date that your policy starts coverage should be the day that you close on your new home at the title company. Make sure that you get a couple of quotes as there are going to be differences in what you are charged.
If necessary you will have to purchase flood insurance. It is a good idea to find out during the sales contract phase whether the home is in a flood zone or not. Flood insurance is much more expensive than regular home insurance.
Closing Time Means You Now Own The House
Talk to your Loan Officer and Real Estate Agent to make sure everything is on track to settle on time about 1 week in advance. Usually about a day or two before signing the final paperwork on your house you need to do a walk through. If you have to bring money to your settlement, make sure that you have it in the form of a cashier’s check, a bank check, or a wire.
If you follow these steps as a guide, you should not come across too many mysteries or surprises in your home buying experience.
