The process of buying a home can be intimidating if you’re unsure of the steps needed to complete the transaction. The good news is that we’re are here to help you understand those steps. Let’s look at the six main steps to buying a home.
What Credit Score is Needed to Buy a House?
If you’re on the edge of purchasing a home, you’ll want to secure a copy of your credit report from TransUnion, Equifax, and Experian. Thanks to the Fair Credit Reporting Act, you can receive a free copy of the report once a year from each agency. Do you really need all three? Yes! There are times when different information is reported from one agency to the next. Check all three for errors and make plans to take care of delinquent accounts.
The credit score required to secure a mortgage loan varies depending on the type of loan and the down payment. A higher credit score can reduce your interest rates and increase the loan amount. Many mortgage companies want a credit score of 640 or higher to approve your loan. There are cases when a lower credit score is accepted. If you’re applying for a mortgage through the Federal Housing Administration, you may get approved with a score that is 500 or higher.
How Much Money Should I Save to Buy a House?
Unless you are one of the few who can pay cash for a house, you’ll need to secure a mortgage loan. Most lenders require a deposit that can equal 20 percent of the property’s price. Even if you get a loan with a lower down payment, you’ll want to keep in mind that you may have to pay closing costs and other expenses.
You’ll want money on hand to cover closing costs and moving fees. Closing costs include fees for inspections, appraisals, title searches, legal services, and administrative tasks. Depending on the terms of your contract, the seller may pay all or part of the closing costs, but you want to have the money available in case you are responsible for covering the costs.
Finding a Real Estate Agent to Buy a House
You’ve come to the right place! We can’t wait to help you purchase the home of your dreams. We are dedicated to helping you reach a successful transaction with as little stress as possible. We know this area, and we can help you locate the home that checks the boxes off your wish list.
You want a real estate agent who communicates at a high level, genuinely listens to your needs, and goes to the negotiation table with strong skills. We would love to set up a time to talk with you about your home ownership goals and answer any questions you have about the home buying process.
Why Get Pre-Approved for a Mortgage Loan?
Being pre-approved for a mortgage loan is beneficial in several ways. This pre-approval tells you exactly how much you can spend on a house. There’s nothing more disappointing than getting your heart set on a house that is outside of your price range. Knowing the exact amount that the lender is willing to loan you saves time and money. Another benefit is that a pre-approval could make a difference with the seller. When a seller sees that you have the ability to follow through with the sale, they are more likely to pay serious attention to your offer.
How to Make an Offer on a House
You want your offer to catch the seller’s attention. The offer should make sense for your budget and not be too low. We’ll sit down with you to discuss the numbers and help you come up with an offer that works. Once you’ve decided on an amount, we’ll deliver the offer to the seller. We’re working on your behalf every step of the way. The seller will have the opportunity either accept, decline, or come back with a counteroffer.
What Happens After an Offer is Accepted
Once your offer is accepted, we’re on the way to closing day! Your lender will schedule an appraisal and inspections. You’ll receive an initial list of closing costs, but keep in mind that your final list of closing costs may be significantly different. If everything goes well with inspections, you’re on your way to closing day. If something becomes an issue, we may have to return to the negotiations table with the seller to discuss terms. We will continue to work on your behalf until all conditions are met.