You’ve finally saved enough money to buy yourself a home. You’re excited to start the process but what are the first steps? Buying a home is a bit more complicated than just picking out a pretty house and saying you want it. To have everything go smoothly you need all ducks in a row before you even begin to look.
Here are some steps to put on your home buying checklist.
1.Know your credit score
This is very important because it is one of the things lenders will look at when you are trying to get a mortgage.
First start by talking to your lender about what you are prequalified for.
They can tell you the debt to income ratio on what you can afford. It is good to talk these guys early on because in the end they are the ones who have the power to move the deal forward. This also shows sellers how serious you are about buying.
3. Liquid cash
Make sure you have enough money for the expenses that come with putting a house under contract. You will need liquid cash available for earnest money and inspection money. This is necessarily to even have a binding contract.
One way to do this is to prepare two earnest money payments. One to bind the contract and the other after the inspection. This way you aren’t putting down one large sum and if something happens to go wrong then you won’t be out of that money while you wait for it to be transferred back.
Downpayment for the house will also need to be paid at closing. It can be anywhere from 5% to 20% of the purchase price so make sure you take this into consideration and have it available.
4. Finding a Buyer’s Agent
As a buyer you want to find an agent who is on your side and only your side. If you go into a deal and let the seller’s agent work for both of you just know they cannot be biased. They cannot wheel and deal for you.
Having a buyer’s agent is very important because they can create a contract in your favor. If you need to get out of the deal then a buyer’s agent will have put contingencies in the contract to help you with this. The buyer’s agent has only your best interests in mind!
5. No credit surprises
After you put in an offer for a home the bank will recheck all of your info before the deal can go through. DO NOT make any big purchases during this time. That means no cars, no opening credit cards, anything that can affect your credit.
The bank checks all of this information 24 hours before the closing and if there are any major changes then this can affect your chances of getting mortgage approved. Again, remember the bank can make or break you.
Don’t be overwhelmed by the steps it takes to buy a house. Get a well-informed, seasoned agent that will make the process as smooth as possible and in the end you’ll be in your dream home!
Happy house buying!