|
Lesson Summary: This reference sheet explains how to buy your first home, in step-by-step fashion. The Home Buying Institute recommends that you take all of these steps, in the order they are presented.
- Check your credit score. It takes time to improve a score, so start early if needed. On average, you'll need a score above 650 to get a loan, and above 760 to get the best rates.
- Get copies of your credit report at AnnualCreditReport.com. Check them for errors, and make corrections if necessary. Mistakes on your reports can hurt your credit score.
- Establish a home-buying budget by comparing your monthly debt to net monthly income.
- Determine how much you can afford to spend on a mortgage payment each month. Do not exceed this amount, even if a mortgage lender approves you for a higher number.
- Get pre-approved for a mortgage loan. This is where the lender reviews your finances and tells you how much they're willing to lend you.
- Hire a real estate agent.
- Determine what kind of house you want. What area? How many square feet? One story or two? How many bedrooms and bathrooms? Write all of this down for your agent.
- Start the house hunting process. Your agent will help you locate suitable homes, but you should do your own searching as well. Save time by screening homes online first.
- When you find a suitable home, have your agent evaluate the seller's asking price. It might be reasonable, or it might be inflated. Look at recent / comparable sales in the area.
- Make your offer including any contingencies (such as a successful home inspection).
- Get a home inspection. It only costs a few hundred dollars, and it eliminates surprises.
- Stay in touch with your agent and escrow company up until the closing date.
- The final step is the closing process. This is where you sign all of the paperwork, pay all remaining fees and commissions, and take possession of the keys. You're now a homeowner!
- Your agent will Look at Recent/Comparable Sales.
|
