Multiple steps go into buying a home. You always want to prepare yourself a few months before you start looking. In this article, we will explain the steps it takes to get the home of your dreams. If you follow a few simple steps, it can be made extremely easy, even if it is your first time buying a home. Some real estate markets may be more difficult than others. Getting a head start and planning is going to be essential.
First step in buying a house: pre-approval
When it comes time to buy a home, you must first get pre-approved. That way, you can know your buying power. It will help you find out what price range you can afford. There are a few factors that go into deciding one's buyer power. A lender is going to look at things like debt to income ratio. How much debt do you have, and how much money are you making in a year? Your credit score will play a big part in getting pre-approved. Typically, lenders won't even lend to you unless your score is 620 or higher. If you find yourself below that number, it may be time to hold off and work on your credit.
A lender will also ask for two years of W2s. That way, they can see how much your net pay was. They will always focus on that number when approving you for a mortgage. Another thing to pay attention to help your chances is not to take out big loans or close any bank accounts before applying for a loan. That will hurt your chances of getting approved. Once the mortgage lender has determined some key factors, they will hand you a pre-approval.
You can contact a lender through quick online research or go to your bank since they know you the best. If you contact a local real estate agent in your area, they may also help connect you with a lender. This brings us to the next step in getting a home.
Choosing the right real estate agent
You are never stuck with one agent. Shopping around for lenders and a real estate agent is always suggested. Suppose you are looking at the Philadelphia market. You can check out a real estate agent Philadelphia to help you find your next home. Using an agent such as Ryan Bullock, who has years of experience, can help make the process easier. On his website, he mentions finding an agent local to your area. They will help you not overpay for a home if they are local.
Suppose you interview with a couple of different agents to get the best feel for who can help. Once you have chosen your agent, they will email you or send you a listing that fits your needs frequently. Once you have found a house you like, your agent will submit your offer with your pre-approval.
When your offer gets accepted
Once your offer is accepted, you must make a good-faith deposit, different from the money you put down with your lender. If it's your first time buying a home, you should speak with your lender about an FHA loan. You can get financed on a house by putting down 1% to 3% of the purchase price once you deposit.
The next step is getting an inspection done. We never recommended waiving inspections. Most of the time, a lender may not allow you to waive an inspection. However, in some competitive markets like Philadelphia suburbs, you will see a lot of waived inspections. Unless you are an expert or know enough to waive inspections, we don't recommend doing so.
Making it to the settlement
Once your offer is accepted, inspections and mortgage loans will be finalized. You will be scheduled for a closing date. Now, this usually takes anywhere from 40+ days. It can sometimes be a long, stressful process, but it should be effortless if you have the right agent and lender. It is essential to follow the instructions of both your lender and agent. You will have no problem getting into the home of your dreams.
