As your buying agent, I can help streamline the process of buying a home and make it easier for you. I’ve aligned myself with the top professionals in the industry, and once an offer has been accepted, I will personally help facilitate the process to close on the home. By working closely with mortgage brokers, title and escrow companies, home inspectors, and home warranty companies I will provide you with the best service possible!
Step 1: Start gathering a down payment
If a home purchase is in your future, now is the time to start saving for the down payment. Of course, you can buy a home with less than 20 percent down. The Federal Housing Administration has lowered down-payment requirements for mortgages it insures to as low as 3.5 percent to make it easier for buyers to get into the market.
But if you contribute less than 20 percent down on a home purchase, you’ll be required to buy mortgage insurance. It protects the lender, not the buyer, from the chance you’ll fail to make your payments.
Step 2: Check your credit report and 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.. Once you know your score, you can find out what interest rate you will likely qualify for.
Step 3: Find a real estate agent
Want a trusty home-buying guide by your side? Most first-timers will want a great real estate agent—specifically a buyer's agent, who will help you find the right houses, negotiate a great real estate deal, and explain all the nuances of home buying along the way. The best part? Their services are free to first-time home buyers (since the seller pays the sales commission). There is a subtle difference between a real estate agent and a Realtor®; the latter is a member of the National Association of Realtors® and adheres to a code of ethics. Consider having a Realtor additional insurance that you'll get the help you need to ace the home-buying process, also check their reviews online.
Step 4: Get pre-approved by a lender
Before you head out home buying, you should seek pre-approvalfrom a lender for a home loan. Pre-approval requires the lender to pull the credit information and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you.As a buyer, just keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Pre-qualify, and you're undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender. Getting pre-approved means having to provide tons of paperwork, but it's worth the trouble since it guarantees you're creditworthy and can truly buy a home.
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.
Step 5: Start looking at homes
The serious house hunting begins. By now you’ve talked things over with your agent and you both know what you really want and need in a home. Look at listings online and with your agent, who will come up with properties for you to tour. Ask your agent to set up appointments to see your favorites in person. If you go to “Open Houses” on your own, just let the agent at the property know you are working with an agent already. As you continue to look you’ll discover some new things to love or hate about homes and refine your search. The more feedback you provide your agent the better that helps them with your home search.
Step 6: Make an offer
Once you’ve found a home you want your agent will work with you to writing and submitting an offer for you. Keep in mind, the listing price is only a starting point. Your agent will understand the market and help guide you to make the most attractive offer, whether it’s below, at or above listing price. This is were the butterflies start you’ve submitted the offer you get to wait. It will seem interminable. You may get neither a simple yes or no but a counteroffer to consider. If you get a solid “no,” it’s back to house hunting.
Step 7: 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. During the inspection 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.
Step 8: Disclosures
California real estate mandates that the seller must disclose any known material defects they are aware of affecting the property. If the home you are purchasing is in a planned development or common interest subdivision you will receive HOA documents to read with all the rules, obligations and costs associated with the community.
Step 9: 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 10: Get a home appraisal
Even if you got pre-approved for your home loan, your lender will want to conduct a home appraisal. This is where they check out the house to make sure it's a good investment. It's similar to a home inspection, but for your lender.
Step 11: Closing day get the keys and move in!
You’ll read and sign papers and then read and sign some more. Even though you’re just sitting around a table, it can be exhausting. But it also means you’re nearing the finish line. Done with closing? Got your loan? Congratulations, you've officially graduated from a buyer to a homeowner! Your sale contract will specify exactly how soon you get to move in. Now it's time to enjoy the many benefits of becoming a homeowner.