Basic Steps for Home Buyers

 

 

Are you feeling a little overwhelmed with what is required in the home buying process?

You are not alone! First-time homebuyers can often feel that there is a lot they don’t know about how to apply for a mortgage, make an offer, or purchase a home.

A qualified and experienced Realtor can help you through the steps but it is helpful to know some of the basics ahead of time!


 

Gather your documents

While not nearly as fun as perusing the internet for your dream home, getting your documents in order will have you ready.

You will need a lot of paperwork when it comes time to get pre-approved (see below) and even more when you actually apply for your mortgage. Things you’ll need to gather include but are not limited to:

  • Pay stubs
  • Two years of tax returns
  • Financial/bank statements for at least the past two months
  • Proof of employment
  • Photo ID
  • Cancelled rent or utility checks

Pre-qualification

If this is your first time looking to buy a home, you might not be clear on how much you can actually afford.

Pre-qualification is a great way to find out, so you can start your home search with more confidence that you are in the right ballpark. This can usually be obtained after speaking with a mortgage lender either in person or over the phone.

Keep in mind that a pre-qualification is not a guarantee that you will be approved for a mortgage; it is just a good first step in knowing what you may be able to afford. There is no cost and no commitment, so this is a simple step that can help you get started.

Pre-approval

This is a tentative commitment between you and a mortgage lender.

Pre-approval is obtained after you have provided a lender with actual documentation of your income, assets and debts.  You will usually receive a letter stating that you have been pre-approved up to a certain amount.  Many sellers will want to see this before they will accept an offer.

Further information on both pre-qualification and pre-approval can be found here.

Make an offer

This is definitely the exciting part! Once you’ve found the property you want to purchase, it’s time to make an offer.

This is when working with a Realtor is extremely helpful. He or she can discuss the details with you and put together the best offer, and then will act as liaison between you and the seller. Often times there is a bit of negotiation but most offers are solidified within a few days.

Have your home inspected by a professional

Once your offer is accepted, you have the chance to have your potential home inspected by a professional.

This usually costs several hundred dollars but is an important step that could save you thousands down the line.  A professional home inspector will know what to look for and will create a thorough report of your potential home.  You may choose to have the current homeowner make repairs or needed changes as part of your offer.  Your realtor or mortgage officer can direct you to a local home inspector.

More information about home inspection can be found here.

Retain an attorney

You will need a real estate attorney to complete your home buying process.

An attorney will prepare all of the legal documents needed before you can close on your new home.  Select and notify an attorney as soon as possible so all of the necessary documents required for your mortgage will be ready.

Local Vermont attorneys and inspectors can be found on my resource page here!

Apply for a mortgage

Once you’ve negotiated the final buying price, you will need to apply for your mortgage.

This is the time when all of that paperwork gathering you did earlier will pay off.  The mortgage application process can take several weeks and it is not uncommon to receive requests for more information during the process.  Respond to any requests as soon as possible, as delays will make the mortgage approval process even longer.

Now is also a time to hold off on making big purchases or opening new credit accounts. During the approval process, any big purchases or new credit may be scrutinized and require even more documentation!

This is certainly not an exhaustive list, but these are the basic steps for home buyers.  Applying for a mortgage and buying a home can be a stressful time, so being prepared as possible really helps. The best part is that at the end of it all, you get to own your new home!


Do you have any more questions about searching for or buying a home?

I would love to hear from you!  Give me a call at 802-488-3455, I would be happy to answer any of your questions and help you find your new home!

Thanks for stopping by!

Sarah

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