10 steps to buying a new home
Purchasing a new home is an exciting event, but it can also be a bit overwhelming! There is so much to do when buying a new house and you want to make sure you do not miss a single step. Fortunately for you there is always help along the way. Check out these important steps to keep in mind as you make your way to purchasing your dream home!
1. start your research
What kind of house are you looking for? Do you have a specific number of bedrooms you are looking for? Or maybe how much acreage you would like to have? All of this plays into the location and pricing of the home you’re wishing to buy. It’s best to start your home search with a good idea of what exactly you’re looking for. This way, you are going into the process with the knowledge of what you want and the specific details of the home that are nonnegotiable for you. However, it is important to try to stay flexible. It might be worth it to sacrifice an extra bedroom in order to meet your budget needs or find something in the neighborhood you’d like to be in.
2. determine what you can afford
Check your credit score and calculate your budget. How much income do you bring in on a monthly basis? What do your monthly expenses look like? Generally, a mortgage lender will recommend that you look for a home that doesn’t cost more than three to five times your annual household income. This suggestion is based off of the home buyer’s debt-to-income ratio as well as on the amount you are able to provide for the down payment. It is usually recommended that you make a down payment of at least 20%. However, you should set this budget based on your own unique financial situation.
3. get pre-approved for a home loan
It’s best to know what you can spend before you go shopping for your dream home. You don’t want to bite off more than you can chew later down the road! Get pre-approved first so you have a budget set as you walk into the rest of this process. A mortgage lender will need proof of your income and savings so that they can give you an accurate amount of what you can get a loan for.
get pre-approved with BlueOx Credit Union
Get pre-approved today by contacting our Trusted Mortgage Lenders at (269) 660-1310.
4. find a real estate agent
Your real estate agent will become your trusty companion during your home search. Real estate agents can assist you in finding the home of your dreams; doing the best they can with the criteria you give them. They can also provide you with additional information about the neighborhood or home you’re looking at that may not necessarily be readily available to the public.
5. start shopping
Time to venture out and find the perfect home for you! Start touring homes that are within the price range that you were pre-approved for. Take your time – this is a big decision. Make sure that you check on little details you may not be thinking about as you walk through – like the plumbing, electrical system and details about the neighborhood and surrounding homes.
6. make your offer
So, you’ve found your dream home! Now it’s time to negotiate a reasonable and fair offer. This offer is based off of the comparable value of the other homes in the neighborhood. Once you and the seller of your prospective new home come to an agreement on the price, you can move onto the next step. Now you are able to move onto the final steps in the process of buying your new home; this includes the home inspection, appraisal and securing your financing for the home.
7. finalize details with your mortgage lender
Getting pre-approved was a great start, but there are some final steps you need to take to complete the process and secure your financing. Therefore, it is important that you don’t take on any additional debts in the house hunting process. Getting pre-approved does not mean your rate is locked in yet.
Now that you have the home picked out and an offer agreed upon it’s time to submit your loan application. Your lender will need some additional documents. It’s important to be prompt and responsive during this process as to not cause any delays in your closing.
apply for a home loan with BlueOx Credit Union
Contact our Trusted Mortgage Lenders for an appointment at (269) 660-1310 or apply now below.
8. get a home inspection
An important step in the home buying process is getting a home inspection. A professional inspector might often catch things that you didn’t when doing your walk through earlier on. During your inspection, if some larger and more expensive repairs are needed, this can also help you negotiate with the current homeowner about potentially having these issues fixed before your closing, or even give you the opportunity to adjust the pricing accordingly so that you have the wiggle room in your budget to make the repairs yourself when the home is yours.
9. get your appraisal
You’re almost there! An appraisal is done by a third-party company and provides you with an estimate of the value of the house you’re planning to buy. This acts as a middleman between you and the seller and ensures that you are paying a fair price for the property. If the appraisal matches your offer price or is even above your offer price, you’ll be in a good position to close on your home. However, if the appraisal comes in as lower than your offer price, there is a chance that your lender will deny it because you’re planning to pay more than the home is worth. This gives you the chance to re-negotiate the price with the seller.
10. close on your new home and move in
Congratulations! You’ve found the perfect home and you’re ready to close and move in! Now is the time to sign all of your paperwork to seal the deal. Plan to spend a couple hours with the title company. Once your financial institution delivers the check to the seller, you can get settled and move into your new home sweet home!
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