If you’re planning on buying a home, you should know what to expect along the way. This checklist will make sure that you are ready for any challenge that comes your way and avoid surprises or delays at the closing table.
Create a budget.
- Creating your budget is the most important step in your home-buying process, so take your time to make sure it’s detailed and realistic. You should include all of your fixed costs (mortgage payment, utilities), variable costs (food, gas), and discretionary spending (entertainment). If you’re not sure where to start with these numbers, try using an online budget calculator.
- Don’t forget to include home maintenance in your budget. If you haven’t owned a home before, you may not be prepared for the cost of upkeep of your home. You need to set aside money each month for the large repairs that will eventually be needed.
- Make sure your budget flexible enough for unexpected expenses but firm enough that you won’t go over budget during the loan application process later on.
Get pre-approved for your mortgage.
A pre-approval letter is a document that shows your lender’s approval of your loan amount, interest rate and fees. It can also include other information such as the type of property you want to buy and how much down payment you plan on making. A pre-approval letter gives you an idea if the home you like will be within your budget and helps avoid wasting time looking at properties that are beyond what you can afford.
To get one: Find out what kind of financing options are available by contacting several local lenders or mortgage brokers in person or online.
Find a good real estate agent.
A buyer’s agent is a licensed real estate professional who represents you in the home buying process. Your real estate professional will not only help you find a home that you love, they’ll help you through the buying process and all of the paperwork. They can also recommend inspectors and other professionals you will want to consult with.
Get a home inspection.
The home inspection is an important step in the process of buying a home. Once you find a home you are interested in, a trained professional will carefully examine your new property from top to bottom, looking for problems that may not be obvious to you or your agent. A good inspector will also be able to point out issues that need to be addressed before closing on the house, which can save you money down the road.
Consider a title insurance policy.
Title insurance is a type of insurance that protects you from loss due to issues with the title to your home, such as back taxes that no one was aware of. Title insurance policies cover those losses.
It is typically paid one time, at closing, when you buy a home, but it can protect you from significant legal costs in the future.
Choose your closing date and set up closing paperwork.
You’ll want to choose a date that works best for you and your lender, but in general, the earlier the better. Most mortgage lenders will give you 30 days’ notice before they close your loan (which means they’ll tell you at least 30 days before they expect to fund it).
Once they give this notice, there are usually no more changes or surprises–and if there are any changes during this period of time, they’ll be small ones that don’t affect pricing or costs much.
There are many steps involved in buying a home.
This is why it’s important to start early and do your research so that you don’t miss anything. If there are any questions or concerns along the way, be sure to ask an expert who can help guide you through the process!