Your Dream Home Awaits and there’s a lot to know when it comes to buying a home and A LOT of important details to consider. Whether you’re a first time buyer, looking for a bigger house or downsizing, I’m here to help you every step of the way. As your REALTOR® it's my goal to provide you with the most comprehensive, expert, caring, and candid advice throughout one of the most important transactions in your life. That is my commitment to you. To help you get started here's a breakdown of the property purchase steps:
STEP 1 - Check your Credit Report and Credit Score
Before contacting a lender, it’s smart to check your credit report. By law, you can get a free report once a year through Annualcreditreport.com. The report pulls data from the three major credit-reporting agencies: Equifax, TransUnion and Experian. Having the information in hand before you talk with a lender lets you dispute any errors in the reporting. Based on your credit report, Fair Isaac & Co. (FICO) assigns you a credit score ranging from 350 to 850. The higher your credit score, the lower the interest rate on your mortgage. Scores are based on:
• Payment history: Have you paid your bills on time?
• Amounts owed: What is your overall debt?
• Length of credit history: How long have you been borrowing money? Mortgage lenders like to see a long credit history.
• New credit: Have you applied for new credit?
• Types of credit: Lenders like to see a variety of types such as bank cards, car loans and student loans.
So what is a good credit score? You can expect a good mortgage rate at anything above 720. Home buyers who pursue an FHA loan can usually secure a loan if their credit is 580 or over. FICO scores are available at www.myfico.com for a one-time or monthly fee. Once you know your score, you can find out what interest rate you will likely qualify for.
STEP 2 - Figure out how much you can Afford
Or better yet, decide how much you’re willing to pay. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Use an online MORTGAGE CALCULATOR to help determine what you can afford.
STEP 3 - Get pre-approved by a Lender
It’s a smart move to get pre-approved for a loan early in your home search. Zillow has an easy-to-use tool that lets you find a licensed lender in your area with a history of positive customer ratings, who can help you get Pre-Approved.
Pre-approval requires the lender to pull the credit information (see Step 1) and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you. If you get in a multiple-offer scenario, being pre-approved may give you an edge because the seller will have more confidence that you will be approved for a loan large enough to purchase their home.
You are not obligated to get a loan from the lender who you get a mortgage pre-approval from. When it’s time to officially apply for a mortgage, it’s best to get loan estimates from at least three lenders to compare their interest rates and fees.
STEP 4 - Start looking at Homes
Let the serious shopping begin! By now you’ve talked things over with your REALTOR® and you both know what you really want and need in a home. Armed with this, your price range and knowledge of the local area, look at listings online that your REALTOR® emails you daily and let her know which properties you'd like to tour. She'll arrange private property showings for you to view the homes and chances are you’ll discover some new things to love or hate about homes and be able refine your search further.
STEP 5 - Make an offer
For most buyers, this is when the butterflies really show up. Once you’ve found a home you'd like to purchase your REALTOR® will submit an "OFFER" for you and negotiate the best terms possible. Your REALTOR® understands the markets climate and will help guide you through the process making your OFFER the most attractive OFFER the Sellers have received thus giving you an edge on the competition with other prospective Buyers. Once your REALTOR® has submitted the OFFER you will receive either a Yes, No or Counteroffer to consider within 24 hours. You will need to submit your first of two Down Payment amounts along with the OFFER . If your OFFER is ACCEPTED then move onto STEP 6!
STEP 6 - Home Inspection Day
If your offer called for a home inspection, this is a big day. Sure, you get to have a home inspector look over the home to make sure there are no unseen defects you want to negotiate to have fixed. But more importantly, this is the most time you’ll get to spend in your new home until closing. Go ahead and start measuring things and figuring out what goes where. This may be the last time you are inside the home until it is yours, several weeks from now.
STEP 7 - PURCHASE & SALES Agreement
At this point in the transaction, you'll have arrived at the PURCHASE & SALES AGREEMENT which will be drafted by the Sellers Attorney post Home Inspection. If there are any issues that arose during the Home Inspection that concern you, your REALTOR® will negotiate the terms of these issues into the PURCHASE & SALES AGREEMENT with the Sellers REALTOR®. Therefore remediating any issues and by having them clearly stated in the "P&S" (PURCHASE & SALES AGREEMENT). Once this Agreement is fully executed you will need to submit your second down payment also know as a "Earnest Deposit" to your REALTOR®.
STEP 8 - Get Insurance and establish Utilities
If you already own a home, simply call your insurance agent and let them know you’re buying a new home. They will handle writing a new policy. If you don’t have an insurance agent, now’s the time to find one because your lender will require Homeowners Insurance. Even if you don’t have a mortgage, insurance is a critical part of protecting your investment. You’ll also want to give utility companies your move-in date to establish service. There’s nothing like moving into a cold, dark house because you didn’t get an account with the power company!
STEP 9 - Closing Day
This is the BIG DAY! You’ll read and sign papers. Even though you’re just sitting around a table, it can be exhausting. But it also means you’re nearing the finish line. Within hours the Deed will be transferred from the previous Sellers name into your name once it is recorded at the Registry Of Deeds. At the Closing table once everything is signed you'll get the Keys to your new home. Get ready to start moving in!
STEP 10 - You're a new HOMEOWNER!
This is it. You did it! Sometimes possession happens a few days after the Closing. The possession date will be stated in your property contracts. Whenever it is, you’ve just ended the adventure of home buying and started the adventure of homeownership. CONGRATULATIONS!