Buying a home can be a big step for anyone. It can be especially overwhelming for those first-time homebuyers who have never been through the process. Unlike shopping for groceries, clothes, etc., buying a home takes preparation. Here are the 10 steps to buying a home, from start to move in.
1. Check your credit
Before a lender checks your credit, you should always check your own first. There are plenty of free sites that do this and won’t hurt your credit score. You will want to make sure all mistakes are corrected and do anything you can to give yourself a boost. Keep in mind that the goal is to ensure your credit report is accurate and reflects positively on you.
2. Get pre-qualified for a mortgage
Getting pre-qualified for a mortgage is an important step before looking for homes. If you start shopping too soon, you may fall in love with a house that is out of your price range. When you get pre-qualified that means you’ll have an idea of whether you’ll be approved and for how much. Then, you can look for homes in your budget.
3. Find a Real Estate Agent
Once you are pre-qualified, it’s time to find a real estate agent. Agents are there to help you find a home and protect you throughout the homebuying process. Ask friends and family if they have any referrals or simply search online. It’s okay to call a few and get a feel of their personality and the way they work before deciding on one.
4. Shop for a Mortgage
There are different types of home loans available, so it’s important to look around and see what works best for you. In this step, you will fill out a mortgage application and the lender will give you a pre-approval for a specific amount and interest rate. Remember, in addition to loan products, it’s also a good idea to shop lenders. They will all have different fees and prices so do your homework. Your agent should have some recommended lenders if you’re not quite sure where to start.
5. Look at Homes and Make an Offer
A real estate agent’s job is to look out for you. They will research and run comps of houses for you to tour and make offers on. Overall, they are there to provide informed recommendations and protect you in the negotiation process.
6. Get Home Inspections
After getting your offer accepted on a property, your real estate agent will work with you during the inspection process. A home inspector knows what to look for when it comes to heating & cooling, roofing, plumbing, mold, pests, etc. Once you have the inspection report, you may want to amend your offer to account for major repairs needed or ask the seller to complete them before you move in.
7. Sign Up for Home Insurance
Your lender will require that you carry homeowner’s insurance on your new home. In case of a disaster, they will want to ensure the mortgage will be paid. It will also give you peace of mind in case the unthinkable happens. Keep in mind that not everything is covered by traditional homeowner insurance. Some coverages like flood and earthquake insurance are in addition to your standard coverage. Depending on where your property is located, you may want to get supplemental coverage for such events.
8. Set Up Utility Services
The goal for utilities is to have the services switched to your name on the same day as your closing. This is because the seller will want to shut off utilities altogether and then you will have to arrange to have them turned back on, which is more of a hassle than switching the services in your name and you don’t want your home to be left without heating, cooling, or running water.
9. Close on a Home
To officially close on a home a title company will be involved. Their job is to ensure the title of your new home is clear, that the seller has the right to sell the property and to record the new deed in your name. All fees are disclosed in advance so you’re not blindsided. Remember closing costs can add up and it’s important to talk to your agent, lender, and the title company early to determine what funds you’ll need to close.
Finally, the day you have been waiting for… move-in day! Congratulations! You may want to make sure everything is painted, the carpet is clean, and minor repairs are done before moving in your furniture. Also, don’t forget to change locks and the garage opener code. Now, kick back, relax, and enjoy your new home!