Interested in buying a home, but don't know how to begin the process? Here are 10 steps for any buyer on how to go about purchasing a home.
1. Gather a down payment
How much do I need? Ideally 20% to avoid added fees. However, as low as 10%, 5% and 0% depending on the type of mortgage you get.
2. Check your credit score
What affects your credit score? Here are five factors that affect it: payment history, amounts owed, credit history length, credit mix, and new credit. The higher your credit score the better. A prime score would be 660-719 and a super-prime score is 720+.
3. Get pre-approved
Meet with a lender at a bank or mortgage company. They can help you figure out how much you can afford on a house.
4. Find your agent
Find someone who has lots of positive reviews, someone who has been recommended to you, and ultimately someone you feel you can trust to help you find your new home. You can look up agents in your area on sites like realtor.com, Zillow or HomeLight.com.
5. Go shop for a home
Look online and see what's available in the area you want to live and in the price range you are looking for. Pick your favorites. Decide what "must haves" and "would be nice" features you are looking for. Do you want a new or used home? Narrow down your options and then reach out to your agent and have them take you to see the homes you've chosen.
6. Make an offer
Once you've found your house, whether it's a starter home or your dream home, make an offer, and make it an offer you are comfortable with. Some things that a seller may be looking for in an offer are: are you paying with cash?, have you been pre-approved?, are you needing to sell your home to fund the purchase of your new home?.
7. Get a home inspection
Have an expert take a look at everything in the home before you buy it to make sure everything looks good.
8. Get a home appraisal
Most lenders will ask for an appraisal to be done.
9. Head to closing
This is when you pay all the various parties involved, pay your down payment, the closing costs, which can be anywhere from 2-7% of the home price, pay loan fees and ultimately get the keys to your new home.