Homeownership in 10 Simple Steps

Buying a new home doesn’t have to be complicated. Here are 10 Simple Steps to follow to buy your first home.
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1. Credit Score

Find out your credit score before you start talking to lenders, find out your credit score and get a free report from 
Annualcreditreport.com. Credit scores range from 350 to 850. The higher your credit rating is, the lower the interest rate on your mortgage will be. Several factors determine your credit score:

• Payments- Did you pay your bills on time?
• Debt- How much do you owe?
• Credit history- How much credit history do you have?
• New credit- Have you applied for credit recently?
• Types of credit- It’s best to have multiple types of credit.

A good credit score is considered to be 720 or higher, but you can usually get an FHA loan if your credit is at least 580.

2. Affordability

​Calculate what you can afford to spend.  Try online tools like Nerd Wallet.    You also need to consider how much you want to spend. You may not want to make a large monthly payment, even if you are approved for a large mortgage. To get a sense of what you can afford in your area, start attending open houses and doing research online for houses that are on the market.

3. Contact a REALTOR®

Find the right real estate agent.  Your real estate agent will be your guide, counselor, and confidant through this sometimes challenging process.  It's important to choose a REALTOR® who will look out for your best interest and has high ethical standards.  Researching the agent's firm, reading their reviews, and interviewing agents are all good steps before agreeing to work with someone long term. 

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4. Get Pre-Approved

​Get pre-approved for a loan before you fall in love with a home, you want to know that you’ll actually be able to buy it. Find a lender first and get pre-approved for a loan before you start house-shopping.  I highly recommend you use a local lender because they have more accountability than online lenders you can't see face to face.  

In pre-approval, a lender obtains your credit information and then decides how much money they would be willing to lend you. They will give you an official letter stating this. It’s smart to do this because if you end up in a bidding war, this may give you an advantage because the seller will see you’ve already been approved for a loan.

Getting pre-approved does not mean you have to ultimately get a loan from the lender who approves you. You are still free to look at different lenders and compare them.

Contact me for recommended lenders:

Recommended Lenders

5. Start Looking at Homes

​Start the shopping process. Talk to your agent and identify your must-haves and your wants. Also nail down your price range and the neighborhoods you want to look in. Your realtor will assist you with finding houses online and touring them. You may be surprised by the opportunities that you find!

To get custom alerts of houses that meet your criteria, fill out this simple form!

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6. Make an Offer

​Make an offer on the home.  This is often the part that makes people nervous. Don’t worry! Working with a great agent will ensure that you make the best possible offer on your dream home. Your agent will be able to advise you whether your offer should be at the asking price or perhaps above or below, depending on the local market. Your agent will also help you with details such as whether there are any contingencies to your offer, or if you will want a home inspection. Once you make an offer, you may get a “yes”, a “no”, or a counter offer. Rely on your agent to guide you through this process.

7. Use a Licensed Inspector

Do a home inspection.  If you decided you want a home inspection as part of your offer, this is the next step.   I recommend you be present for the inspection if at all possible. A home inspector will thoroughly examine the home and provide a report about the house.   The report can be useful as it will often have more information about your house than you need for the negotiation process. 

When negotiating repairs, the contract calls us to focus on material defects and not updates or maintenance items.  This often comes up when exploring heating and cooling systems (HVAC).  If the HVAC is older than it's statistical life but working properly, replacing it would be an upgrade/update as it is not a material defect (not working properly).

The home inspection is also an opportunity for you to spend time in your new home envisioning what you want it to look like. Enjoy this exciting time!

Contact me for my recommended inspectors:

Recommended Inspectors

8. Insurance and Utilities

Unless you are already a homeowner, you will need to find an insurance agent and purchase homeowner’s insurance. This will be required by your lender. If you owned a home to begin with, just tell your insurance agent you’re buying a new home and they will make a new policy for you. Homeownership is necessary to protect your investment even if you don’t have a mortgage.

It’s also important that you contact your utility companies to set up services so they begin the day of settlement. You’ll want to move into a new home with climate control and running water!

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9. Close on the House

Closing day is a very exciting day! There will be a lot of paper signing, but don’t let it wear you out. You’re almost done!

You will need to bring a photo ID to settlement and the funds you need to close on the house.  If you plan on wiring money, beware of Wire Fraud.  More information here...

10. Move Into Your New Home!

Yay! You’re finally done! Get the keys from the former owner and move in. The move in day will vary based on your contract, so it may be on the same day that you sign the closing papers, or it may be a few days later. Either way,  you are now officially a homeowner and can start this exciting new chapter in your life. Congratulations!

Move-In Checklist

Source: https://www.zillow.com/home-buying-guide/10-steps-to-buying-a-home/