Buying a home can be smooth or rough — depending on many factors:  title companies, lenders, agents, the market, or the seller. It is important to have a clear cut idea of what to expect on your home search. Many people have a preconceived idea of what to expect when purchasing a home, but I have broken down the home buying process into 10 simple-to-understand steps.

1. Determine your readiness

It is obvious that your current financial situation will be the biggest factor in your decision to buy a home. Understanding the costs of home buying and home-ownership are important steps in figuring out when you’re ready to ‘take the leap’ to purchasing a home.House owner/real estate agent giving away the keys

2. Become optimal mortgage candidates

Credit score is vital in determining if you are able to obtain a mortgage loan. This is why prepping for getting a mortgage is essential. Try to pay off or pay down outstanding balances on credit cards, car loans, and other debts you may have. In doing so, it will help improve your debt-to-income ratio, which will definitely improve your credit score. Having a credit score over 700 will help you get the best rates possible!

3. Get a pre-approval letter

Getting ‘pre-approved’ means that a lender has reviewed your financial situation, credit report, and believes that you may qualify for a certain loan amount for one or multiple loan programs.  The lender will then provide you with a ‘pre-approval’ letter, which will be a testament to your buying power when you are ready tohome-balance put an offer on a home!

4. Determine your budget

Your pre-approval letter shows how much the bank is willing to lend you, based on credit, income, and other factors. What the bank will give you for a mortgage amount is not necessarily what you may feel comfortable spending however. How much you can really afford is a personal decisions. No one wants to be ‘house-poor’ so it is imperative to determine what your comfortable monthly mortgage payment would be after personal and recreational expenses.

5. Find a real estate broker

I can’t reinforce enough how important it is to aligning yourself with someone you trust to be your real estate professional. Check out my blog on the 7 Main Roles of Your Real Estate Broker.

6. Select a home

Your broker will arrange home viewing for homes that suit your search criteria. Once you’ve chosen the right property, it’s time to make an offer!

7. Make an offer

Putting in an offer can be a fragile time. Current market conditions, time of the year, repairs needed, and the length of time the home has been up for sale are huge determiners of the offer price. Many people do not know that the offer prices is not the only element that is negotiable. Repairs needed, closing costs, home items — nearly everything is negotiable!

8. Home inspection

Once your offer is accepted, the home inspection is next on the to-do list. Typically an inspection and the response is required to happen within 10 days of mutual acceptance (may vary depending on the contract). The inspection comes to check out the home to judge the condition of the homes and determine any red flags; such as damage, pests, structural issues, appliance conditions, etc.). Depending on your area, home size, and the inspection company, inspections are typically between $300-$600.

9. Appraisal time

With the inspection completed and taken care of, it is time for the bank to coordinate an appraisal. The appraiser provides an independent estimate of the value of the home you are buying. The appraisal will let all the parties involved know that you are paying a fair prHouse owner/real estate agent giving away the keysice for the home. If all goes accordingly and you get the stamp of approval from the bank — it’s time to close!

10. Closing

The process of closing a home can take several weeks (sometimes longer) and quite a few steps. During the ‘escrow’ period, you will work with your lender to secure your mortgage. During the closing, your lender may require you to purchase a policy of homeowner’s insurance, and you will have the option to purchase an owner’s policy of title insurance. After the appraisal comes out with a thumbs up and all the lender and seller obligations are met, it’s time to head to the title company to sign the final mortgage documents. On the closing date, you will then receive keys to your new home!

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