Steps to the Home Buying Process.

Here, we have the order of things in the home buying process.

The homebuying process is similar to preparing a great meal. First you take inventory of everything you need before you begin, and so is the case when buying a home – especially in today’s highly competitive environment where multiple offers are normal and bidding wars are commonplace.

Check your credit –

Not only does credit determine if you will get a mortgage, but it will also determine the interest rate you’ll pay. The best rates are for the borrowers with the best credit; lower credit scores mean higher rates because of additional risk to the lender. Free copies are available from all three major credit bureaus at www.AnnualCreditReport.com.

Determine your budget –

List your income and living expenses; you’ll get a good feel for what you can afford. Also need list what big-ticket expenses are in the future and how much you should be saving for them. Lenders use debt to income ratios to qualify borrowers, but it may be more than the buyers feel comfortable with. This is good information to discuss with your mortgage professional.

Meet with a mortgage banker –

Is an important element in the steps to the Home Buying Process… their job is to get borrowers approved and instead of using calculators on a website, a trusted, experienced mortgage professional can look at your credit, make suggestions if it can be improved, run verifications on income, assets and liabilities and suggest loan programs to benefit your specific situation. They can even provide a pre-approval letter and phone verification that may be the tipping point to negotiating a successful contract with a seller.  Get an idea what your monthly mortgage costs would look like with our mortgage calculator.

Initial investment –

The down payment and closing costs are related to the type of mortgage, which is generally, dependent of how much of the buyer’s savings is available. The down payment is typically 20% but can range between zero and up.  Mortgage insurance is necessary on most loans if the down payment is less than 20%. Buyer’s normal closing costs range between two to five percent of the mortgage.

Costs of homeownership –

Most mortgage payments include the principal and interest plus 1/12 the annual property taxes and insurance plus mortgage insurance if required. Other expenses that will be incurred by the homeowner include maintenance, HOA dues, utilities, upkeep and replacement of equipment and appliances.

Process and timeline –

People tend to feel more comfortable when they understand the process of buying a home and the length of time it takes for the different steps. Your real estate agent will be able to provide this information to you based on the type of mortgage and local market conditions.

Know the numbers –

Being familiar with the basic statistics makes planning and even, negotiation easier to predict. Important data, relative to the type of property you are buying, includes the current supply of homes for sale, days on market, sales price to list price ratio, and percent of cash sales in your price range. This is another area that your real estate professional can be very helpful.

Must-have features –

The concept of a “dream home” is more myth than reality. People rarely get everything they want even when they are building a home. Especially, in a highly competitive market with rapidly increasing prices, buyers should create a list of their “must have” and “nice to have” features and amenities. This can be helpful when you are determining whether to write a contract on a home.

Build your team –

Buying a home takes a team of professionals; select the best players and you’ll have a much better chance for success. Your real estate agent is in a unique position to guide you through the entire process and recommend trusted professionals for each job that needs to be done.

Just like following a recipe, the steps in the Home Buying Process are important and will affect the outcome. Get everything together before you start looking at homes.

For more information on buying your Desert Home, download our New Home Buyers Guide for 2021

If you have questions about the Home Buying Process, drop us a line, we’re happy to help.