Buying a home can be a daunting process. You’ll feel more confident about your home buying journey when you understand the chain of events and what’s required of you, as well as every other person who’s involved in the transaction.If you have any questions about the home buying process please call WWHT’s Homeownership Specialist Debbie Timon, (802) 246-2127. In 2018, WWHT helped 76 families become home owners. These are some of the steps they took to achieve that goal.
Step 1: Get Your Finances in Order
Your credit reports are an ongoing record of how you’ve managed your finances. You should know exactly what they say about your financial history before you apply for a mortgage. These reports and your credit score play an important role in the loan approval process, and they also determine your interest rate and other loan terms that lenders will offer you.
You might be surprised by what you find when you look at your credit reports because errors are not uncommon. You’re entitled to one free credit report a year, so get it and check it, and check your score, too. Do it early in the process so you have time to fix any problems and bring your score up, if necessary.
Step 2: Get Familiar with the Mortgage Industry
Finding the right loan and lender is crucial to your homebuying success. It’s up to you to determine which lender is best for your particular needs, and it’s always a good idea to have an understanding of the loan process before you talk to a lender. Know how your debt-to-income ratio works, and why it’s important. Learn about discount points, and decide if you really need them. Will you have to carry mortgage insurance? And shop around for a lender when you’re ready.
Step 3: Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you’ve talked with a lender and you’ve been preapproved for a loan.
Pre-approval helps you in other ways as well. Consider this scenario: A home seller gets two similar offers. One is accompanied by a letter from the buyer’s bank that states that she’s been pre-approved for a mortgage in the amount of the offer. The other has no supporting documents. Which offer do you think the seller will consider first?
Step 4: Determine Your Wants and Needs
Buying a home isn’t as difficult as you might think, even if you’re short on funds, but the process will go a lot more smoothly if you’re familiar with your real estate market. Narrow down your wants and needs before you start looking at houses, and differentiate between the two.
Don’t neglect to consider the possibility of resale somewhere down the road. Gauge how likely it is that each property you look at will hold its value, or—better yet—appreciate.
Step 5: Learn to Work with Real Estate Agents
Real estate agents represent buyers, sellers, or both, and they can work as neutral facilitators for either party in some states. It’s essential to understand agent duties and loyalties and your responsibilities to your agent before you make that first phone call.
Step 6: Start Searching for a Home
You’ll be inundated with possibilities, especially in the beginning of your home search. Your agent will send listings to your cellphone. You’ll probably pick up “House For Sale” magazines and read classified ads in your local newspapers. You’ll probably spend an inordinate amount of time surfing the Internet for homes. You might even plan afternoon or nightime drives to preview neighborhoods.
Step 7: Handle Pre-Offer Tasks
Deciding whether you want to buy a house involves taking a good, hard look at its structure and its features, but there are many other topics that are every bit as important to your purchase. You might want to consider having a home inspection to flush out hidden problems, or even talk to the neighbors to get firsthand opinions of the neighborhood.
If you’d like to learn more about our Home Buyer Education Workshops visit our “How to Buy a Home” page or contact Jeremy Paquette, jpaquette@homemattershere.org, (802) 246-2116.
