JOURNEY OF HOME BUYERS
HOME BUYERS
More often than not, buyers dive into their home buying journey unprepared, unorganized, and uncertain about their requirements and the entire process. And regardless of whether you are a first-time or an experienced buyer, buying a home is a big financial decision and must be made carefully.
I am committed to making your home buying process as smooth as possible by guiding you to make informed decisions. Here, we have put together a quick home buying guide showing the buying process and how to prepare, including buyer tips and the documents/ information you need for getting pre-approved.
Buy your Dream Home
The Buying Process
01
01.
SECURING YOUR FINANCES
Using a mortgage calculator; you can draw up an estimated budget based on your income, savings, debts and financial commitments as you should be able to pay your mortgage every month. You also want to have some cash in hand for a down payment and closing costs as you will be required to put a 3.5-20% down payment depending on which loan type you get.
02.
APPLY FOR A MORTGAGE
Once you have evaluated your financial situation and you are armed with a realistic budget, you can confidently approach a lender to evaluate loan options. When you find a suitable loan that suits your needs, you can get a pre-approval letter. A pre-approval letter will estimate your borrowing power based on your financial information. A pre-approval gives you more negotiating power and tells sellers that you are serious.
03.
APPLY FOR A MORTGAGE
Now that you can begin looking for homes with your real estate agent, you can save your time and efforts by looking at only homes within your budget. Put some feelers out with family and friends, search for listings online, and have your real estate agent show you listings that are right for you. When you find a good match, your real estate agent will help you decide and make the right offer.
04.
HAVE THE PROPERTY INSPECTED
Once you have a deal with the seller, you can complete the mortgage application process through the lender you were pre-approved through. Your real estate agent can walk you through the process of submitting your application, providing the required documentation and verifying these documents. You have between 30-60 days to fulfill your purchase contract, so you have to move fast. You also want to invite a professional to inspect the property for quality and safety. Endeavour to find a trained inspector who is thorough and will not miss critical issues to encourage a sale.
05.
CLOSE, MOVE INTO YOUR NEW HOME
Once your mortgage is approved, the home inspection doesn’t reveal any significant issue that would warrant you rescinding the contract, and nothing falls through at the last minute, then it’s time to close the deal. Closing involves signing a lot of paperwork and double-checking everything. Once the funds are transferred to the seller, then the home is yours, and you can move in immediately granted there wasn’t an occupancy agreement in your contract.
PREPARING
TO BUY
02
01.
CHECK YOUR CREDIT SCORE & REPORT
A good credit score will significantly influence your loan terms. A good credit score of 640 or higher can get you pre-approved with lenders, some lenders still have programs that can get you pre-approved with a score as low as 580. Pay off any large open collection accounts and keep documentation of payment to give to lender. Make all your bill payments on- time and pay down your credit card balances. You have to wait 2 years after a bankruptcy discharge to apply for a home loan.
02.
GET PRE-APPROVED
Pre-approval means you are eligible to get a loan as long as your credit score remains good and nothing changes about your financial situation just before you get the loan. This is a very crucial part of the home buying process, and it gives you more credibility in the eyes of the seller. Know that getting pre-approved is different from getting prequalified.
03.
HIRE A SKILLED REAL ESTATE AGENT
You cannot navigate the real estate market on your own without making mistakes that you wouldn’t ordinarily make with a real estate agent. You need a real estate agent who knows their apples, is familiar with the neighborhood you want to live in and knows what homes are worth. More than helping you make informed decisions, remember that purchasing a home involves contracts and contracts should be negotiated. Your real estate agent will cleverly negotiate, make sure you get the best deals and explain the terms of these contracts so that you are aware of what you are getting into.
04.
BUY THE HOME YOU CAN AFFORD
Regardless of what your dream home is, analyzing your financial situation and buying a home you can realistically afford saves you from terrible financial disasters. You do not want to be house poor because of your mortgage.
These are the documents and information you need for getting pre-approved
- Proof of income/employment (30 Days of pay statements)
- Bank statements (60 Days)
- Two prior year W2 forms
- Social security cards, valid ID such as drivers license
- Good credit score 640 or higher some loans can be approved with a 620
- Most Recent 401k or 403b statement (only if applicable)
05.
THINGS TO AVOID BEFORE CLOSING
8 things NOT to do between your date of getting pre-approved and your closing
- Don't buy a new car or trade-up to a bigger lease
- Don't quit your job to change industries or start a new company
- Don't switch from a salaried job to a heavily-commissioned job
- Don't transfer large sums of money between bank accounts
- Pay your bills on time -- even the ones in dispute
- Don't open new credit card accounts
- Don't accept a cash gift that will be deposited into your account without filling out the proper gift letter (you can get this from your lender)
- Don't make random, undocumented cash deposits into your bank account
Meet
Shawn Collins
Realtor®
As a Real Estate Professional, I have a passion for helping buyers and sellers find their dream homes.
Whether it is a community with playgrounds and book clubs, new construction, first time buyers or transitioning empty nesters, it is my honor to help you with this very important life decision.
I am here to help educate, guide, and serve you with honesty, integrity, and professionalism through every step of the process.
