When buying a home for the first time it can be a little intimidating. You have no idea what to expect and you really need someone to guide you through your entire home buying process. It can appear to the new buyer that there’s far too much involved and too many hoops to jump through just to buy a house. But it can be a much easier process for the new buyer when he or she enters into the home buying process much more prepared and informed.
Before buying a home, it’s important to have an idea about what your FICO credit score is and the condition of your credit. You can find this information out by ordering your credit reports from the three major credit reporting agencies; Trans Union, Equifax and Experian to review your credit reports. As far as obtaining your FICO scores, one way to obtain your scores would be to order your credit scores from myFICO. You can order all three of your scores from this website.
A different option would be to have a mortgage loan officer pull your credit and discuss the status of your credit with you as well as your credit scores. This might be a good route to take because your mortgage loan officer is the one who would be working for you to get an approval for a mortgage loan so that you can buy a house. He or she would be able to tell you whether you are ready to buy a house according to your credit status and credit scores at that time or not.
If you’re in a situation whereas your credit and scores need some improvement first before you can qualify for a home loan, then your mortgage loan officer may be able to share with you and work with you on what you can do to improve your credit status and scores to help you get to the place to be able to buy a home. It may take a little while, but as you remain patient and diligent to do everything that you need to do, you will see that your credit status and scores will continually improve and once your credit has improved and you’ve reached your target credit scores you will be able to buy your first home. The key is to never give up.
Whether you are a buyer, who can buy right away, or a buyer who needs to first work on his or her credit, once you are ready to buy a home, it’s very important to be prepared for the general process and costs that are involved in purchasing a home. There are twelve main steps and certain costs involved in the home buying process.
Generally, when you are ready to buy a home:
1. The first thing that a buyer should do is set an appointment with your mortgage loan officer to view your credit status and scores and also to find out how much home you can afford before going to look at homes.
2. You then choose a Realtor to find and locate homes for you to look at according to your personal home criteria that you will share with him or her. The Realtor will require that you provide him or her with either a pre-qualification or pre-approval letter from your mortgage loan officer which will reveal to her what price range to search for homes. Sometimes your mortgage loan officer can refer you to a Realtor and vice versa.
3. When the Realtor has found property listings according to your personal criteria requested for a home, she will assist in touring you through the homes until you have found the home that you just can’t live without.
4. At this point, your Realtor will make sure that no contract offer has been made and accepted on the home already and if not, he or she will then write a contract offer on the house for you. It’s important to ask questions, make suggestions or express any concerns that you may have at this point so that your Realtor can write the best possible contract offer for you that will satisfy you as his or her client.
5. Once the contract offer is written, either your Realtor or the Seller’s Realtor will then present the contract to the Seller.
6. Generally, a $1000.00 earnest money cashiers check, regular check or money order is required to present with the contract. This will show the Seller that your interest in sincere.
6. If the Seller accepts the offer, then the process really begins. The home is taken off the market and will be shown to no one else during the closing process.
7. Generally, within 3-7 days, if the Buyer chooses to have an inspection done, He or she is generally required to pay to have an inspection done. Depending on the inspection results, the buyer via his or her Realtor/Agent can usually request that repairs be made to the property unless the property is being sold as is. Inspections commonly range $250.00-$400.00 depending on the Inspector.
8. The buyer will usually also be required to pay for an Appraisal to be done. One main purpose of the appraisal is to make sure that you, the buyer, are paying what your house is worth and not less. If the appraisal comes back with a price value that is less than the offer made by the buyer, the Seller has the option to sell the home for the lower appraised price if he or she chooses to do so. The appraisal can also be used to reveal to the buyer whether there is equity in the property already. For instance, if the accepted purchase price is $200,000 and the appraisal value comes back at $215,000, subsequently, there is $15,000 of equity in the property already. The buyer will be buying his or her new home at a definite advantage. Appraisal cost commonly range $300.00-$350.00.
9. After the appraisal is done and shows that the buying price of the property is good, the closing can soon be set as long as no other problems arise.
10. The Buyer is also required to purchase Homeowners insurance before attending the closing. Homeowners insurance cost depends on the property value and other factors, but commonly range between $400-1300.00 in a residential purchase depending on the home, etc.
11. Lastly, if the Buyer expects to retain an attorney, which is definitely a good idea, the buyer will usually pay the attorney at the closing as well. Attorney cost commonly range $300-$600 depending on what the attorney will execute for you in your closing.
12. Once the closing is completed, the buyer receives the keys to his or her new home. Congratulations is underway he or she is now on his or her journey to enjoying his new neighborhood and home.
