Getting ready to buy your first house? To make the process less intimidating, it helps to break it down step by step. Below is a quick look at the homebuying experience as well as what to expect.
First, it’s important to note the timeline from the beginning to closing on the house varies based on the market as well as numerous other factors. Because of this, you should anticipate the process to last from as short as 15 weeks to eight months and beyond.
One of the first steps is to analyze your options based on your finances. Are you going to apply for an FHA loan? Is your credit in good shape? Knowing the answers to questions such as these at the onset can help you secure funding and get started off right.
If everything is set — or you want to learn more about specific financial matters — reach out to a mortgage lender for pre-approval. In our seller’s market, having a pre-approval letter has become essential in showing sellers you make a good candidate. Plus, a lender can help establish your initial budget and identify any loose ends to tie up to get a better mortgage rate.
After obtaining approval and enlisting the help of a real estate agent, you’re ready to browse listings. Whether you opt to look at homes suggested by the realtor or listings available online, it’s advised to limit search results by price range, location, number of bathrooms and so on. Having and abiding by a realistic expectation helps streamline the overall process.
Once you’ve found suitable options, schedule a few tours. Although virtual tours are helpful, it’s best to assess the property yourself before committing. When you’re ready to make an offer on a home, be prepared to face competitors. You may need to work with your realtor to negotiate with the sellers and narrow down any contingencies to get the house you want.
When your offer is accepted, you’ll be under contract and enter what is known as the due diligence period. At this time, you’ll need to schedule an inspection and appraisal for the home. These steps may be modified based on how quickly you want to move the process along but should not be totally disregarded.
Next, it’s time for the underwriting process, which may take a few days, or weeks if your assets are complicated. An underwriter will review and verify your finances as well as the property details. It’s crucial to be responsive to the lender and underwriter to keep the process moving.
Last, but certainly not least, is closing. After the loan is finalized, the deal is reviewed by both sides and one last walk-through of the house is performed. If everything checks out, the final paperwork is signed, funds are transferred and you’ll get the keys to your new home!
Want to learn more? Check out the accompanying resource for a handy breakdown of the homebuying timeline.
Infographic provided by The Sherry Riano Team, FHA loan lender