You’re poised to make the leap: After years of renting, you’ve decided that it’s time to become a homeowner. How do you do it? Familiarizing yourself with the steps to buy a house before you actually make your move can help you avoid expensive missteps.
Steps to Buy a House
While the exact journey may vary, there is a certain rhythm to buying a house. Having a basic understanding of the process and exploring common expectations allows you to plan ahead and consider your moves carefully so that you’re ready to make smart choices as you progress toward your housing goals. What are the steps to buy a house?
1. Educate yourself.
When you’re buying a house, you’ll face a lot of choices. It’s best to make informed decisions, so take a little time to educate yourself. Read up on relevant topics online, speak to professionals who work in the field, or consider taking a first-time homebuyer class. As NerdWallet points out, these classes sometimes offer more than just truly useful information. Participants who complete them may find that they qualify for grants or other forms of down payment assistance.
2. Start saving.
Buying a home isn’t cheap, and while few homebuyers actually come up with the infamous 20-percent down payment, you will need cash. According to HomeLight, the median down payment for novice homebuyers in 2019 was 6 percent. There are also closing costs and other expenses to consider. So, although it isn’t necessary to have a huge amount of cash on hand to purchase a home, would-be homebuyers should get serious about saving as soon as possible.
3. Check your credit.
Your credit score will have a major impact on your ability to get a loan, so check your credit report. A higher credit score makes borrowing money more affordable. If errors are dragging yours down, request a correction. What if your credit score is lower than you’d like? MyFico suggests making it a point to pay your bills on time and working to reduce the amount of debt that you owe. To see your credit score rise, keep your credit card balances low. Don’t just move debt around; pay it off.
4. Get preapproved.
Why should you get preapproved before you start shopping for a home? As The Mortgage Reports points out, getting preapproved for a home loan lets you find out how much a lender will loan you. It’s an excellent way to find out how much you can truly afford to spend on a house. After all, there’s no reason to waste time looking at homes that are out of your price range, so getting preapproved before you shop lets you shop smarter. Plus, real estate agents and sellers are generally more willing to treat you as a serious buyer if you arrive armed with a letter of preapproval.
5. Find a home.
You can work with a real estate agent, scour online listings, visit open houses, or use any combination of these strategies to find the perfect home for your needs. Once you locate it, it’s time to make an offer. As Zillow explains, the asking price is just a starting point. You’ll need to consider the market and work out what you feel is a fair offer. In addition, you’ll want to think about factors like earnest money, contingencies, disclosures, and the closing date as you write up your offer.
6. Head to closing.
Once your offer is accepted, it’s time to prepare for closing. There will be a bit of a scramble as inspections and appraisals are completed, your financing is finalized, and everything is checked and double-checked. As Realtor.com explains, closing is when everything finally comes together. Papers are signed, funds are exchanged, and you pay closing costs, which typically fall between 2 and 7 percent of the home’s purchase price. Then, you get the keys to your new home.
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If you’re wondering about the steps to buy a house, how to get preapproved for a home loan, or what is involved in refinancing, turn to the team at PrimeLending West Texas. We’re happy to answer questions and take pleasure in assisting people as they reach for their housing goals. How can we help you?