Buying a home is perhaps one of the most rewarding milestones you’ll experience in a lifetime. Being a homeowner is more than having a place to live. Owning a home is a statement that you’ve arrived into adulthood. You’re ready to stake your claim on your piece of the American dream pie. Enjoy the excitement that pumps through your veins with the adrenaline rush that comes from each thought of your perfect house. However, beware that if you’re not prepared and don’t know what to expect along the way, your journey could be riddled with stress, disappointment, and even heartbreak. Here are the six steps you need to know for owning your own home.

💰 Step One: Financial Preparations

Buying a house is a major financial investment. Traditionally, buyers invested a twenty percent deposit toward the purchase of their home, financing the other 80 percent through a home mortgage loan. Although the traditional method is still the best-case scenario, may buyers have found special loan programs that minimize or eliminate the down payment altogether.

Aside from the down payment, buyers pay closing costs. Closing costs are service fees accrued during the transaction for services such as the inspection, appraisal, title check and transfer, and other services. Closing costs can equate to between two and five percent of the home’s total value, which adds up to thousands of dollars. Closing costs are not generally covered in your home mortgage loan and is usually paid out-of-pocket. However, some loan programs do offer to envelope the closing costs. Furthermore, some sellers are willing to negotiate closing costs so that the seller pays a portion or all the closing costs for the buyer.

Next, buyers are required to buy homeowners insurance and to pay property taxes, additional expenses many first-time buyers overlook. Also, for buyers who take advantage of loan programs that minimize or eliminate closing costs, private mortgage insurance is also required.

But it takes more than money to qualify for a home mortgage loan. Lenders will also take into consideration your credit score and your debt-to-income ratio. Your credit score demonstrates your ability to borrow and repay money in a timely fashion whereas your debt-to-income ratio reveals your ability to live within your means without over-extending yourself financially.

📝 Step Two: Pre-Approval for Your Home Mortgage Loan

Your next step towards homeownership is to obtain pre-approval for your home mortgage loan. Pre-approval declares you a qualified buyer to real estate agents and to sellers. Sellers prefer to work with pre-approved buyers because pre-approval saves time and eliminates the risk that the buyer won’t qualify. Pre-approval also helps you determine your true home-buying budget.

🙋 Step Three: Finding the Right Real Estate Agent

Ask around for referrals and recommendations for real estate agents. Read reviews and check out ratings. Interview agents whose specialties match your goals, and who are experts in the areas in which you’d like to live. Talk with your agent about your wish list and your budget, then enjoy the house-hunting portion of your journey.

🏠 Step Four: House Hunting

Mind your manners when touring homes; you never know when a homeowner may be within earshot. Hold your questions and comments until you’ve left the home and can talk with your agent in private. Be realistic about your expectations and try not to emotionally attach to a house before you’ve got the keys in your hand.

🤝 Step Five: Offers and Negotiations

Your agent will help you craft and submit compelling offers, but the outcome depends on the seller and competing offers. When the seller accepts your offer, you’ll submit an earnest money deposit and then set a date for closing.

📅 Step Six: The Road to Closing Day

Before closing day, the house you’re buying will have to be inspected, appraised, and possibly surveyed. The title to the house must be checked and verified to be clear of liens or holds. Your real estate agent will oversee the timeline to closing and will advise you along the way about what to expect. On closing day, you’ll sign a few final documents, funds and paperwork get transferred, and you walk away from the closing table a proud new homeowner.

Your real estate agent is the best source of information about the local community and real estate topics. Give Brett Dunne a call today at 909-575-8812 to learn more about local areas, discuss selling a house, or tour available homes for sale.

View All Buying Posts