What Are the 5 Steps in the Home Buying Process?

Purchasing a house or Home Buying is a significant milestone for almost every individual. However, it could be intimidating while you are unsure what to expect. In today’s uncertain times of high list prices as well as low rates, the decision for purchasing a home might feel overwhelming. No matter whether you are a first-time homebuyer or planning to make an investment for a portfolio, it is advised not to undertake the homeowner process without research.

Even before you begin to search for a perfect house, you would need to ensure you have a strong credit score. Along with a good credit score, you require money for a down payment and closing costs, preapproval for the mortgage loan, and a reputed real estate agent Blacktown century21.

Step by Step Home Buying Process  

The best way for preparing is to know what to expect. Here are the key steps that you would need to complete before you could get the keys to the new house

Step 1: Check the Credit Score

Before you start the process of purchasing a home, you would need to ensure you are in a position for taking on this important milestone. Therefore, the first step is checking the credit score as well as reviewing the finances. It is worth noting that getting a loan is not easy. Before providing you with a loan, all lenders would look at your credit score as well as your financial history.

Both credit score and financial history would show whether you could get the mortgage loan as well as what interest rate. Buyers having higher credit scores tend to get better interest rates. Therefore, you need to get an idea of where you stand before you move further into the home-buying process.

Step 2: Have Money for Down Payment as well as Closing Costs

Though the mortgage spreads out home-buying costs over several years, you would still require money for the down payment and closing costs. Remember, the large down payment means you would have more equity and the monthly mortgage payments would also be lower. By paying more upfront, you would save on the interests.

Along with the down payment, you would require money for the closing costs as well. Though the amount you would require would vary according to the loan amount as well as tax requirements.

Step 3: Determine How Much You Could Afford

Before you have a word with a lender, it is good to calculate how much you could yourself. A lender would tell you for how much amount you qualify. However, you would wish to ensure you would not overstretch yourself by defining the budget and what you could afford for spending on monthly mortgage payments.

After determining your affordability, ensure you consider the lifestyle that you wish to maintain as well as leave a cushion for emergencies. Ensure you keep in mind certain things like college funds, family vacation as well as retirement in the budget planning.

Step 4: Select a Mortgage Lender

Several homebuyers do not realise that they could shop around for the lender prior to selecting one. There could be variations in terms, interest rates as well as closing costs that every lender offers. Therefore, it is vital to do homework. While comparing the lenders, ensure ask each for giving a loan estimate.

Along with loan estimates, do not forget to consider customer service. Getting a loan and making payments is not easy. Unfortunately, there might be interruptions along the way, this is why you would wish to choose a lender making the mortgage process simple and convenient. The dependable lender guides you at every step.

Step 5: Get Pre-Approval for the Loan  

A pre-approval would tell how much the bank could lend you as well as specify the costs of getting the loan. It would also demonstrate to the seller that you are serious about purchasing the property as well as able to buy. All you need to do is provide the lender or bank with financial details like credit reports, income, investments, and savings. They would review the information and grant the pre-approval for borrowing a certain amount.

Step 6: Hiring a Reliable Real Estate Agent

A reputed real estate agent would represent you in the home-buying process and help you find the best house. To ensure you hire the best real estate agent in Blacktown consider asking few questions like

• From how many years you are working as a real estate agent?
• How many clients are you now working with?
• Could you give some references?

Step 7: Determine Priorities for the House

After determining your affordability and selecting an agent who could help through the process, list down your priorities. Tell the agent about your requirements like location, type of house, number of bedrooms, age and condition of the house, etc.

Step 8: Begin House Hunting

Once you communicate your priorities to the real estate agent, the expert would send you the listings. It is advised to talk with an agent about things you dislike and like about every property. Get to know the area and tour the house to ensure each house meets your requirements. Ensure you keep eye on the potential red flags such as electrical and plumbing issues, problems with the HVAC system, water damage on walls, etc.

Step 9: Make an Offer

When you find the right property, ask the agent to do a comparative market analysis for determining a fair price before you make an offer. It is important to understand that the longer the property has been on market and the less interest means you would have more power for negotiation.

Step 10: Get the Home Inspection

Once the seller accepts your offer, consider arranging a home inspection. You would wish to hire a professional for examining the house you are planning to purchase. The home inspection would help to find areas requiring major repairs or renovations. You could request the seller to complete the significant repairs before closing.

Post home inspection, it is advised to walk through the house with your real estate agent in Blacktown before closing. Doing so would help you ensure the seller completes the requested repairs and everything is on order. After checking the property, review the closing disclosure; sign the legal documents, and pay the closing costs for getting keys to your new house.