Ready to buy your first home but not sure where to start? We’re here to help. We know that making a home purchase can seem a bit daunting – especially to a first-time buyer – so we’re going to break it down into just a handful of steps. Up next are the five easy steps to buying your first home.
1. Go house hunting
Before you can buy a house, you must find the right one. While you need not necessarily take six months to house hunt, it’s a good idea not to rush the process, either. After all, this is the place where you could be spending the next five, 10, 15, 20 years, or even longer. This is also the place where you might raise a family or a pet. The bottom line? You want to make the right choice for YOU. So, don’t rush into something you might later regret. If necessary, check out several homes. Also take the time to connect with a buyer’s real estate agent who can give you a tour of multiple houses and discuss your options. Once you find “the one,” you’ll know. And then it’ll be time to move on to the next step of the homebuying process.
2. Find a mortgage lender
3. Get pre-approved
One of the first things your Fairway of the Carolinas mortgage adviser will want to do after your initial conversation is get you pre-approved. Pre-approval for a home loan is more critical than it has ever been to having your offer accepted by a seller. As part of the pre-approval process, you’ll provide your lender with bank statements, pay stubs, job and credit history, and a summary of your monthly expenses. We’ll also check your credit score. Once you’re pre-approved, you’ll receive a letter stating the exact amount for which you can expect loan approval.
While a pre-approval doesn’t 100% guarantee the loan, it’s a huge step. Pre-approval is by far the best way to show a seller you’re serious about a home purchase. To learn about Fairway’s Certified Pre-Approval option, click here. This option ensures buyers up to $7,500 in reimbursements if their loan isn’t ultimately approved for an unforeseen reason.
Also, keep in mind that you can get pre-approved for a loan before even finding a house. That’s right. A pre-approval simply tells you how much home you can afford in terms of cost. It’s not tied to a specific home purchase. So, we recommend becoming pre-approved before you ever start shopping for houses. This way, you won’t waste any time looking at homes out of your price range.
4. Make an offer
Once you’ve been pre-approved and settled on the house you want, it’s time to make an offer. In this competitive market, there’s no guarantee your offer will be accepted, so try to make it a good one. Your real estate agent can help you negotiate with the seller’s agent to find a price that works for all parties. It’s quite possible the seller will make a counteroffer, and then you’ll follow up with a second or even third offer depending on how flexible the seller is willing to be. Don’t be discouraged if your first or even second offer isn’t accepted. Perhaps this isn’t the house for you, or perhaps it is – and you just need to do a little haggling to get everyone on the same page.
5. Prepare for closing
We did say there were five easy steps to buying your first home, right? Well, here’s No. 5. While there are multiple mini-steps buried in this one last step, they can all be summarized as follows: preparation for closing. Once your offer has been accepted, your lender will schedule a home appraisal – which lets you and the lender know how much the home is worth. You might also schedule a home inspection to make sure everything checks out to your satisfaction. Unlike the appraisal, we don’t require an inspection, however.
The last big hurdle to clear will be final loan approval, which occurs in underwriting. During this process, the underwriter will carefully review your income, credit, assets, appraisal and any other relevant loan documents. Assuming you’ve met all the requirements for the type of loan you want, you should be approved for your loan. Then, it’s just a matter of signing some papers, doing a final walk-through and showing up on your closing date. Once all the papers are signed at closing, you’ll have the keys and the home will be yours. Then, it’ll be time to celebrate!