:: buyers :: step by step
:: the buying process |
a home may seem like a daunting and complex proposition, perhaps because you've
never done it before or never understood all the details of financing and closing
However, once you know what steps
are involved, understand the purpose of each step, and learn how each is accomplished,
buying a home will be revealed for what it is a series of simple steps that
lead toward a substantial emotional and financial commitment.
to Buy |
your reasons to buy.
Because it is such a weighty commitment, buying a home shouldn't come with
regret or second thoughts. Before you buy or even begin the process, make sure
that your reasons and resolve to buy a home are clear and firm.
your financial house in order. It's hard to have any idea about how much home
you can afford if you don't know how much of your money you want to devote toward
housing. If you haven't done so already, thinking about buying a home is a perfect
reason to get your finances in order.
Check your credit history. Even if you aren't going to
buy a house, this is a good idea. If your credit report has mistakes or other
blemishes, your credit rating will suffer. As a result, you will hurt your chances
of securing financing and will probably pay higher interest rates or possibly
not be able to secure financing.
Figure out how much home you can afford. Getting an accurate
estimate of what priced home you can afford will make your search more realistic
and efficient. It may even give you cause to reconsider buying altogether.
vs. rent. Depending on your situation, renting
a home instead of buying may make more sense (financially or otherwise). It's
a possibility that's worth considering. You can also look for Lease-Options,
or Rent to Own deal
Get prequalified. When
preparing to buy a home, you estimate how much home you can afford. Now it's the
lender's turn. Using financial information that you provide, prequalification
is a lender's analysis of your general position as a borrower, or in other words,
an estimate of what you can afford. Getting prequalified gives you an even clearer
understanding of what home you will be able to afford, and a prequalification
letter from your lender helps strengthen your position with sellers in the early
stages of negotiation.
for loans. Finding a good loan is probably the most confusing part of the
process (and definitely the dullest), but since it will dictate how much your
monthly payment will be, it deserves your full attention. To simplify, your job
is to decide what kind of loan you want, whom you want to get it from, and how
long you want the term to be (most are either for 15 or 30 years).
Get preapproved. When you get preapproved,
a lender gives a firm commitment to loan you up to a set amount without knowing
the specific property. It's particularly useful because when you make an offer
on a home, waiting for financing won't jeopardize your offer. Once you are preapproved,
closing the loan is quick, depending only on a satisfactory appraisal and title
report of the home. To get preapproved you apply for a certain purchase price,
loan amount, and loan program, but these assumptions can change after you're preapproved.
Find a home.
Finding the perfect home can be challenging, especially if you are moving
to a new area. Regardless of where you're moving, the Internet offers powerful
tools to research neighborhoods and find available homes.
Close the deal. Once you've found
the home you want, you still must get it inspected, have it appraised, get a report
on the title (to make sure the history of the house is clean), negotiate the price,
and close your financing.
in. If you've made it this far, you're close to the finish line, but the race
isn't over. Moving presents its own challenges, and there's a litany of things
to be mindful of, such as changing your address and more.