Buying a new-to-you home can be a long process, but if you know the steps then it may make the process a little less stressful for you.
Make a budget for yourself.
Yes, the mortgage company will pre-approve you for a certain amount, but you should make a realistic budget about what you can ACTUALLY afford. The mortgage company usually pre-approves potential homeowners for more than they can actually afford, so keep this in mind.
I remember when I first applied for a mortgage, I think I was making around $25,000 a year, yet I was approved for a $150,000 house. Could I actually afford that price? Definitely not…
Get pre-approved.
Before you start shopping around for a new-to-you home, you will want to get pre-approved. You don’t want to fall in love with a house only to find out that you were approved for much less. You can save your time and both the seller’s time.
You will have to bring in numerous documents in order to get approved. These could include: W-2s, tax returns, bank account statements, proof of funds, and so on. Also, if you had any large deposits recently, you may be asked to show where the deposit came from.
Find a real estate agent and start looking at homes.
Some decide to start looking with a real estate agent, but keep in mind that they can be very helpful, and you don’t have to pay for them. They can help you negotiate the price, tell you about any potential problems, and so on.
When buying a home, you should look into many different things. These can include:
- The safety of the area.
- The schools in the area.
- Will the home need any repairs?
- Is the neighborhood what you are looking for?
- Do you want a garage?
- How many bedrooms and bathrooms do you want?
- Don’t forget a home inspection! Home inspections can show you any potential problems that the house may have that you might not notice. This can include mold, termites, radon, and so son.
Make an offer.
After you find a home, you will then make an offer. Your offer will either be accepted or rejected. You may be able to make another offer or the seller may make a counter-offer.
Close on the home.
After your offer is accepted, you will then start the process to close on the home. You will get a home appraisal (this is usually done by the mortgage company), get home insurance, deliver any checks, and so on.
You will then sign the largest stack of papers ever. It can get intimidating, but just keep in mind that once you are done signing, it usually means that you get the keys to the home!
What else did you have to do when you bought your home?
