Home Buyer's Guide
Buying a home is a significant process that involves several steps. Here's a comprehensive guide to help you through it:
- Assess Your Financial Situation
- Check your credit score: Your credit score will influence the mortgage rate you get.
- Determine your budget: Use an online calculator to see how much house you can afford.
- Save for a down payment: Aim for at least 20% to avoid private mortgage insurance (PMI), but some loans allow for lower down payments such FHA 3.5% down payment.
- Find a Real Estate Agent
- Get recommendations: Ask friends and family for referrals.
- Interview agents: Choose one who understands your needs and knows the local market.
- Sign an agreement: This may be an exclusive buyer-broker agreement.
- Get Pre-approved for a Mortgage
- Research lenders: Compare rates and fees from multiple lenders.
- Submit an application: Provide financial documentation (income, assets, debts).
- Receive pre-approval: This shows sellers you’re a serious buyer and gives you an idea of how much you can borrow.
- Start Home Shopping
- List your priorities: Consider location, size, amenities, etc.
- Visit homes: Attend open houses and private showings.
- Evaluate each property: Take notes and pictures to compare later.
- Make an Offer
- Determine the offer price: Based on market analysis and your budget.
- Submit the offer: Your agent will present it to the seller.
- Negotiate terms: Be prepared to negotiate on price, closing costs, and contingencies.
- Get a Home Inspection
- Hire a licensed inspector: They will identify any issues with the property.
- Types of home inspection: General home inspection, sewer scope, HVAC, electrical, plumbing, roof, termite
- Review the report: Use it to negotiate repairs, credit, or price reductions with the seller.
- Appraisal and Secure Financing
- Home appraisal: Lender orders an appraisal to ensure the home’s value matches the purchase price.
- Underwriting: The lender's underwriter reviews your loan file for final approval.
- Submit documents: Provide any additional information requested by your lender.
- Schedule the Move
- Declutter: Sort through every drawer, closet, cupboard and shelf, removing items you no longer need or like. Donate or sell items that are in good condition.
- Moving estimates: Get estimates from moving companies.
- Set up utilities: Transfer or set up utilities in your name.
- Close the Deal
- Final walk-through: Inspect the home to ensure it’s in the agreed-upon condition.
- Closing disclosure: Review this document that outlines the final loan terms and costs.
- Sign documents: Attend the closing meeting to sign all necessary paperwork.
- Pay closing costs: Arrange a wire transfer for the closing costs.
