What are the Steps for Buying a House?

There are many steps involved in buying a house. It can be a little daunting, especially when several of those steps lead to making a major financial investment.

When you break it down though, the steps can be simplified into two processes – finding the right home and purchasing it.

We’ve outlined each process to simplify your next steps so that you can feel confident and comfortable with buying a house.

What steps are needed to find the right home?

Home search step 1: Decide what you want

Knowing what you want in a home before you begin your search can help you ensure that the homes you’re interested in are also affordable.

Consider factors such as location, number of bedrooms, number of bathrooms, the age of the home, and any additional factors that could impact both your lifestyle and your finances, including homeowners association fees or condo fees, for example.

Home search step 2: Get help from a realtor

Work with a real estate agent who can guide you through the home buying process.

A realtor can help you weigh the options for homes that include all of the features you want, while still being affordable. They’ll have the local expertise to guide you to the best locations and to inform you on how the market could affect both your price and timing for making an offer. 

When it comes to shopping for a house, your realtor can get you showings, write offers, negotiate, and advocate for your preferences and interests for a home.

Home search step 3: Make sure it’s the right house

Once you’ve found a home and made an offer, there are checkpoints it will need to pass before the sale is finalized. This protects all involved in the sale.

Your mortgage lender will want to have an appraisal done on the home to see its value. The lender will use this value to decide how much money to lend you for your mortgage. It’s important to have your home appraised at or slightly above what you offered.

You’ll also want to have an inspection done to get a more in-depth understanding of the condition of the home. It includes evaluating the foundation, the roof, electrical systems, appliances, and a variety of other areas to ensure there are no surprises after you close on the home.

Depending on the results of the appraisal and the inspection, you can then negotiate with the seller to lower the price of the home or make necessary repairs before reaching a final purchase agreement.

What steps are needed to purchase a house?

Purchase step 1: Find a trusted lender

The first step in the actual purchase process for a home is to find a lender that you want to work with. Finding a lender could range from researching who provides the lowest interest rates, to finding someone you’re comfortable with when discussing your questions and needs.

Determine what factors are important to you. Do you want a dedicated contact who can discuss next steps, or are you more interested in minimal interactions? How much of the process do you want to do online, especially when it comes to exchanging documentation? How flexible are lenders on closing dates and how well do they communicate changes, expectations, and next steps?

Purchase step 2: Be prepared for the mortgage process

Early in the process, it helps to get pre-approved* for a mortgage to know what you can afford and show you’re ready to make an offer when you find a home you like. This is relatively simple, and involves completing a mortgage application with a lender.

Lenders will evaluate your credit, assets, and income to determine how much house you can afford. Once you’re approved, you’ll get a letter that includes the loan amount, which helps you nail down your budget for what you can spend. When you’re ready to make an offer on a house, this documentation can help you negotiate, as it shows a seller that you’re ready and able to buy.

*Pre-approval is based on a preliminary review of credit information provided to Fairway Independent Mortgage Corporation which has not been reviewed by Underwriting. Final loan approval is subject to a full Underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.

Purchase step 3: Work toward closing

You’ve found a home you like, you’ve made an offer, and are ready to finalize the sale. After you’ve reached an agreement on a purchase price between yourself, the seller, and the lender, you can lock in your interest rate and work toward closing. 

You’ll need to review your Closing Disclosure with your loan officer three days before closing, which will tell you exactly what you need to pay at closing and summarize all of your loan details.

As the lender gathers all required documentation and information, you can work with them to set a closing date. At closing, you’ll need to bring your ID, a copy of your Closing Disclosure, and proof of funds for your closing costs. You’ll sign a settlement statement, your mortgage note, the mortgage or deed or trust, and pay your down payment and closing costs. With the keys to your new home in hand, you completed the steps to buy a house.

What steps do you need to take to buy a home?

We’ve provided a general overview of the process to buy a home. If you have specific questions about your situation, we would be happy to discuss the details with you.

A professional loan officer can give you the recommendations and specifics you need to move forward. We can even refer you to a real estate agent if you’re just beginning the steps to find a home.

Reach out to us or fill out a mortgage application to get started.

Photo by Jessica Lewis on Unsplash