How to Buy a House
How to buy a house is a valuable skill set for any potential homeowner to master.
Consequently, I have a quick primer for anyone who dreams of purchasing a place of their very own. You can make this purchase with minimal hassle and upset when you understand the process.
Buyer’s Guide from Ginny Jackson Real Estate
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How to Buy Your House 101: Check Your Credit Score
If you decide to buy a house, congratulations! The first step is to check your credit score. Along with other factors, lenders use your credit score to set the terms of your loan. Obviously, the better your credit history, the easier it is to secure a financing deal with the best terms and interest rates.
Crucial to How to Buy a House: Make a Budget
Once you know your credit score, you can set a realistic budget. In order to do this, consider:
- The maximum loan for which you qualify
- The amount of your down payment, plus a little extra for unexpected closing costs
- Other bills, including groceries, utilities, daycare costs, tuition, etc.
When you have a realistic budget, how to buy a house becomes much easier.
Arrange for a Down Payment
In order to avoid private mortgage insurance—otherwise known as PMI—you need at least 20% of the home’s purchase price to place a down payment. Do some research to learn the down payment requirements for a loan. That way, you know exactly what you need when it comes time to buy a house. If someone offers to pay your down payment, get a gift letter from them as soon as possible so your lender knows the money comes from a legitimate source.
In the event you don’t have enough money for a down payment, there may be other options available, including:
- Federal loans backed by the Federal Housing Administration, Veterans Administration, and U.S. Department of Agriculture
- Conventional loans backed by Fannie Mae and Freddie Mac
- Local and state first-time homebuyer assistance programs
Get Pre-approved for a Mortgage
Undoubtedly, how to buy a house is much easier when you are pre-approved for a mortgage. Not only does this give you the power to make an offer on a house, but it also clarifies how much you can afford for this purchase.
As an experienced real estate agent who loves what she does, I strongly recommend you work with a seasoned mortgage lender who can discuss your options, including first-time homebuyer programs and other incentives.
Get Help with How to Buy a House: Hire a Real Estate Agent
By all means, an experienced real estate agent can show you how to buy a home in the most economical, expedient, and satisfying manner possible. Specifically, an excellent real estate agent:
- Understands the market and know if your budget is realistic or not.
- Can point you to areas nearby your desired neighborhood that may be less expensive or more satisfying.
- I will answer financing questions and connect you with area professionals who can help with home buying.
By all means, if you are ready to hire a real estate agent in the Naperville area, contact me. As a real estate agent and guide, I am here to help you navigate the financial considerations and emotional aspects of how to buy a house.
The Fun Part of How to Buy a House: View Multiple Homes
When it comes time to buy a house, I strongly advise viewing prospective homes in person. While that is not always possible, I believe that it is much easier to know whether a property is worthwhile once you have walked through its rooms, seen its layout, and experienced its character.
Make an Offer: The Nitty Gritty of How to Buy a House
One of the important lessons about how to buy a house involves making an attractive offer. Particularly, a great realtor helps prepare a complete offer package that includes your offer price, pre-approval letter, proof of funds for a down payment, and other contingencies.
A Crucial Step to How to Buy a House: Get a Home Inspection
Certainly, a home inspection is a critical part of how to buy a house. Not only does it give you an idea of the property’s structural and mechanical issues, a home inspection determines how to proceed with the closing process. You can get recommendations for home inspectors from your realtor or find one via online reviews.
Secure Your Financing Deal
When you are ready to close, you must submit many documents. It helps to have a folder of paperwork handy for these requests. Necessary documents may include:
- Recent bank statements
- Tax returns
- Proof of income
- A gift letter that explains major deposits to your bank account
- Credit reports
Do a Final Walk-through
Preferably, you can do a final walk-through of the property before transferring to you. Then, ask your real estate agent to come with you so they can serve as a witness and help answer any questions. That way, you have an ally and advocate at your side.
Last Step to How to Buy a House: Close!
After all, the contingencies are met, and you get the go-ahead from the closing agent, you can close on your home. You will receive a disclosure three business days before the closing date that specifies all the sale details. Then, you meet at the closing with your real estate agent, the seller, the seller’s agent, and the closing agent.
At that stage, you wire your closing costs and down payment. Then comes the beautiful moment when the keys to your new house are handed over and you officially become a homeowner.
Congratulations—you have successfully learned how to buy a house!