Buying a home can be a long and complicated process, especially for first-time homebuyers without family or friends to give them pointers. It isn’t made easier by the fact that many of the steps to buy a home may happen at the same time, or slightly staggered, or in different orders depending on your personal situation. To help with this, we’ve compiled a general outline of steps to expect to hit on your home buying journey in the general order you can expect them. You can also visit our homeownership initiative at uhousi.com for a step-by-step on what to expect when purchasing a home.
What lenders are available in your area, and which will work best for you? What about real estate agents? Are there alternative paths to homeownership that appeal to you? What’s the housing situation like in the area that you want to live in? How much money will you need saved, and should you research down payment assistance options? These are just a few of the many questions you may answer on your journey to homeownership. Beginning the process by sitting down and writing out the questions and goals that you have; tackling them in small, manageable chunks will do wonders to boost both your preparedness and confidence.
Second: eligibility and preapproval.
All prospective homebuyers looking for a mortgage will experience this at some point. After you settle on a mortgage lender to work with, your lender will request to pull your credit and request documents to assess your financial situation. Your lender will then this to provide you with information on what loan options may be available to you and what loan options may be best for you . During this step you should learn about the maximum mortgage amount you can qualify for, what kind of interest rates you can expect, which types of mortgage you should pursue (such as an FHA mortgage, a Conventional mortgage, or a VA mortgage).
Third: searching and selecting the home.
Some potential homebuyers know which specific home they want to purchase even before they begin researching the mortgage process. Others don’t even begin looking for a home until they have a real estate agent, a lender, and a preapproval. Wherever you fall on the spectrum, you can’t buy a home until you find it, put an offer on it, and have your offer accepted in writing. When considering which home to purchase, it helps to make a list of things to consider and how important they are to you. For example, your budget (estimated by you or quoted by your lender), the general area you want to move into, the property taxes for that area, school choice, and urban density will all determine, to varying degrees, on what amounts to a dream home for you.
If you search for a home and put down an offer on it before finding a lender, keep in mind that not all sellers are willing to wait for you to find a lender and get approved for a mortgage, especially if they have other pre-approved buyers with their own offers.
Fourth: home inspection.
You never fully know what’s wrong, right, or just surprising about a future home until you’ve lived in it a while, but a home inspection is a great way to get an idea and catch any red flags before it’s too late to back out of a deal. Are there safety issues that need to be addressed? Are there needed repairs that may affect the value of the home? Just because a house looks like a home on the surface or during a walk-through doesn’t mean that it isn’t hiding issues under the surface.
Fifth, and final (or is it): closing and moving in.
After choosing a mortgage lender and applying for a loan, you will be approved if you meet all lender conditions and qualify for the loan. You’ve also put down an offer on a At this point you’ve chosen a mortgage lender and gotten preapproved and ultimately approved, you’ve put down an offer on a house and had it accepted, ensured that your finances were in order for the purchase, and taken care of any other loose odds and ends.
You may have had to negotiate the contract with your seller a little, you may have been asked by your lender to provide more documentation, and you probably spent time figuring out whether to hire a professional mover to get you into the house when the time comes or whether to just load everything into grandpa’s trailer and take care of it yourself. But the day of closing has come and all that’s left is for you to sign a lot of paperwork. Then the funds are transferred, you receive the keys to the home, and you are officially a homeowner. Congratulations! For some, it’s a great feeling, but there’s still work to do. You still need to actually move in, settle down, and rearrange furniture until your spouse is happy. You still need to decorate and make sure the house feels like home. But, for the most part, those are the fun parts—much of the work is over.
Sixth: Maintaining your home.
There is a secret sixth step to purchasing a home, and that’s actually living in it for the months and years that follow. You’ll need to make monthly payments on your mortgage (and on the down payment assistance, if any). You’ll need to take care of home repairs. You’ll also need to familiarize yourself with a new area and social sphere. Not everything can be predicted after you’ve purchased and moved into a home, so expect the unexpected and prepare for anything. You never know what surprises life may have in store for you.
See how CBC Mortgage Agency may be able to help your home buying process with Chenoa Fund down payment assistance. To learn more about how you may be able to purchase a home, and to uncover which mortgage lenders in your area offer Chenoa Fund down payment assistance, visit chenoafund.org.