Buying a home can take longer than you expect. Especially if you’re unsure of the house buying process.
There are a lot of benefits to owning a home, including building equity and investing in something that’s your own. Costs associated with a house can be more predictable and stable than those associated with renting if you secure a fixed-rate mortgage to buy your home.
When it comes to purchasing a home, the process can be lengthy and involved. It’s possible getting a home can take years. However, with some planning, you’ll be able to decide when and how much to spend on a new home. Below is a timeline that gives you an idea how long it can take and when you need to do certain tasks.
The price of houses varies depending on where you live in the U.S., with the median value more than $200,000. The average home buyer doesn’t have that type of cash hanging around, so more than likely, you’ll have to get a loan to purchase the house. One of the first things you’ll need to know is your credit score.
Your credit score will let lenders know what interest rate to charge you on a loan. It will also tell them if you are high risk and able to pay off your debts. Taking the time to ensure your credit score is as high as possible will allow you to get a home loan at a decent rate. That means paying bills in full, on time.
Building a savings account is not only a good idea, it will also give you money for your down payment. The more you can put down on your house, the less your mortgage payment will be every month. The type of loan you secure for your home will determine how much you’ll need to put down, but on average, you can expect to put down between 5 and 20% on the sale price of your home.
In addition to the down payment, there are other costs associated with buying a home. These include earnest money, or the money you’ll pay the seller to prove your offer is in good faith, and closing costs. If you have a savings account built up, you can offset these costs and not go totally into debt when buying a home.
While it’s nice to imagine living in a huge house with updated amenities and a backyard pool with jacuzzi, you’ll have to pay for those upgrades. It’ll be easier to secure a loan if you look for a payment you can afford. That might mean living in a more modest house than you dreamed of, but owning a home is a reward in itself.
Take the time to figure out a budget. You’ll need to include:
Once that’s done, you’re on your way to looking for a home.
More than likely, you’re new to the home buying process, which means you have a lot of questions. Having a realtor gives you an expert who can answer those questions, and they will help you find houses within your budget and guide you through the home buying process. Not all realtors are created equal, so take the time to find the one who works best for you and has your best interest in mind when shopping for a new home.
This is where the fun begins. Now you get the chance to look at homes in your price range, tour them and picture yourself and your family living in the space. You can trust your realtor to find the perfect home for you, and you can also use online and print resources, such as local magazines and the newspaper, to find other possibilities.
Keep in mind that one house probably won’t have everything on your wish list, so there will be some compromise. However, you get to decide what you’re willing to compromise on and what you’re not.
While this step isn’t completely necessary when looking for a home, it’s a helpful one. It gives you an idea of what the bank is willing to lend you, so you know exactly what you’ll be able to buy. It also helps when you’re ready to make an offer on a house so that the seller knows you’re serious and can get funding in place.
Once you’ve found the perfect home, you’ll have to make an offer to the sellers. This process can vary widely depending on your market. It could take anywhere from a few hours to a month before your offer is accepted and you’re under contract to buy the home.
Once the seller has accepted your offer, you’re on your way to inspections. The purpose of these is to let you know that there aren’t any major, expensive issues with the house. They also let you know if the house is worth what the seller claims. Banks also use these numbers to finalize your loan.
Buying a home can be an exciting, life-changing event, but it’s a long process. To ensure you’re getting the best value for you and your family, take the time to plan ahead for the long house buying process.