Steps on buying a home

While there are certainly more details involved, the following is an outline to help you understand the basic process of purchasing a home.

1. Prepare by Managing Your Finances

  1. Maintain a good credit history (or make credit repairs if necessary)
  2. Minimize debt
  3. Save for a down payment 3.5-20%, owner occupied
  4. Get an idea of how much you can afford by understanding your debt-to-income ratio

2. Research Mortgages

  1. Understand basic loan types
  2. Familiarize yourself with costs involved (points, origination fees, etc.)

3. Find a Lender

  1. Work with someone you can trust
  2. Find out as much as possible about how your loan is priced
  3. Get the best deal you can

4. Get Pre-Approved for Your Mortgage

  1. Pre-approval will provide you with a better chance of having your offer accepted.
  2. When you find your home, you will officially apply for the mortgage and receive a Loan Estimate (LE) of the closing costs

5. Find a Realtor

  1. Speak with multiple candidates
  2. Interview clients from the recent past
  3. Work with someone you can trust

6. Go Home Shopping

  1. Is it the home?
  2. Consider the commute, amenities, schools, etc.

7. Make an Offer

  1. Your Realtor should help you determine what is reasonable
  2. Don’t be afraid to barter

8. Get Insurance Prior to Closing, options include

  1. Title insurance
  2. Homeowners insurance
  3. Flood insurance
  4. Home inspection
  5. Home warranties

9. Go to Closing

  1. Bring photo identification
  2. Be prepared to review and sign a lot of paperwork, including the HUD-1 Settlement Statement (essentially the official “receipt” of the transaction; may differ from GFE).