The home buying process can be a bit intimidating if you don’t understand the terminology and steps. Let’s take a closer look at the main six steps to buying a home.
🏡 How do I buy a home?
You’ll want to make sure your credit score is high enough to secure a home mortgage loan. Your savings account should hold enough money to cover the down payment, closing costs, and moving expenses. Choose a real estate agent to help with the details. Get a pre-approval letter for a home mortgage loan to help you search in the right price range. Once you find a home, make an offer that gets the attention of the seller. Once the offer is accepted, close on the home and pay all money required.
💯 What credit score do I need to buy a house?
Due to the Fair Credit Reporting Act, consumers can order a free copy of their credit report once a year from Experian, TransUnion, and Equifax. Order a copy from all agencies because each one may have different information and credit scores. Check the reports for delinquent accounts that need to be resolved and for any errors that need to be reported.
A traditional mortgage loan typically requires a score of 640 or more to receive approval. You may get a reduced interest rate if you have a higher credit score. There are loans available that accept lower credit scores. For example, the Federal Housing Administration (FHA) may approve scores of 500 or higher depending on the other criteria needed.
💰 How much money do I need to save to buy a home?
The majority of home buyers need a home mortgage loan in order to purchase a home. Typically, a mortgage lender will require a percentage of the selling price of the property as a down payment. This amount can vary but is usually around 20 percent.
Closing costs are the fees compiled during the home buying process for administrative tasks and service costs. These costs include fees for inspections, appraisals, title searches, attorney services, and other associated tasks. The seller may agree to pay all or part of these costs, but you should be able to pay them in case the contract calls for that to be your responsibility.
🙋♀️ Do I need a real estate agent to buy a house?
While you can go through the home buying process without the help of a real estate agent, you may be putting yourself in a dangerous position. A real estate agent understands the legalities of purchasing a home. They also have the training and knowledge to handle all the details on your behalf. They are skilled negotiators, and you’ll want a real estate agent on your side when it comes to knowing how to place and negotiate an offer.
☑️ Should I get pre-approved for a loan?
Having a mortgage loan pre-approval can be a good idea for several reasons. The pre-approval gives you a targeted price range that is based on the amount of loan you’re likely to be approved to receive. You don’t want to set your sights on a property that you can’t afford. A second benefit of the pre-approval comes into play when you are placing an offer. A seller could choose your offer over one without a pre-approval because they know you are more serious about the purchase. Your pre-approval gives them a sense of assurance that you can follow through with the purchase.
📝 How do I make an offer on a house?
You want to catch the seller’s attention with your offer. In a real estate climate that has multiple offers coming in to most sellers, you want yours to stand out from the crowd. We can help you create an offer that fits your budget, makes sense for the market, and is attractive to the seller. We’ll then deliver the offer and bring back the answer from the seller’s agent. They will accept, decline, or send back a counteroffer.
📑 What happens when an offer is accepted?
Once the offer is accepted, closing day is just around the corner. The mortgage lender sets up an appraisal and any inspections that are needed. A copy of the estimated closing costs is delivered to you. Keep in mind that this amount may change significantly depending on inspections and other fees. If all goes well with inspections and the appraisal, we’ll make plans for the closing on the home. If not, we’ll be there to negotiate the contract if that’s something you wish to do.