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If you’ve had the luxury of planning out your home-buying experience for weeks or months, you’ll know exactly what steps you need to take to go from being a first-time homebuyer to a full-fledged homeowner.
The situation may be different if you lack time to dive deep into the process. We can surely say there’s no shortage of important things to consider when selecting your home, but our short guide will outline some steps you’ll need to take to make your buying process smooth and pleasant.
There’s no right or wrong order to follow these steps to buying a home, but keep them in mind as you proceed. Thus, you might be pleasantly surprised at how much of a difference you can make by knowing the home-purchasing process in the USA!
Steps To Buying A Home
Decide Which Mortgage Type Is Right For You
The first decision you need to make is to choose between a fixed or a variable mortgage. A fixed rate is when the rate on your home loan stays fixed for the length of the mortgage, and a variable rate will rise or fall based on the market value of your home.
The final cost will be highly dependent on the option you choose. That’s why we strongly recommend you research the market or consult real estate experts.
Find A Home
If you already have a general idea of where you’d like to live, begin your search at ofirio.com, a real estate website that provides useful online tools to help you find your next home. Their AI-powered search tools will make it simple for you to get a home that meets your needs.
The next step is to narrow your search and focus on finding a home that fits your budget and lifestyle. Using the on-site search tool, you can set up multiple filtering criteria that will allow you to refine the list and review the houses’ size, location, and price, and decide whether they meet your expectations.
Check For Mortgage Requirements
This is one of the most important steps. It’s important to know whether or not you’ll need to make payments for a mortgage or you’ll be paying it off with the purchase of the home.
Here’s how to figure out if you’re going to have to pay a mortgage when you buy a house:
- Check how much of a down payment you can afford for your home. The lower your down payment, the higher the monthly mortgage payments will be. This is because a large portion of your monthly mortgage payment will go toward paying off the principal that your home loan is tied to;
- If you can make a 30 percent down payment, then your monthly payments will likely be a little less than $2,000 per month. However, if you make a down payment of only 10 percent, you could end up with a monthly mortgage payment of more than $3,500;
- If you don’t have enough money to make a 10 percent down payment, check for any government programs available to help you make the purchase. These might include first-time homebuyers or down payment assistance programs. You can find this information on the website of the U.S. Department of Housing and Urban Development (HUD).
Determine Your Loan Type
Next, check to see if you’re eligible for any mortgage programs. In order to get a mortgage, you must have a steady source of income. If you switch jobs often, this can be a problem. Fortunately, there are programs to help you when you’re going through a difficult situation. Again, it is where the Department of Housing and Urban Development (HUD) can help.
Decide How Much You Can Afford
Once you know what programs you qualify for, the next step is to see how much of a monthly payment you can make.
First of all, you need to find out how much your monthly mortgage payment will be. You can obtain this information from your lender. You should also consider your other monthly costs. After all, you’ll also be making payments on the mortgage and paying for utilities.
These can often total about $1,200 a month. That means that you’ll need to take $1,200 from your budget. So, make sure that this fits into your financial pool.
You’ll need to make sure that you know what you’re bargaining for before you start your home-buying process. Do your homework, and find out what a similar home is going for.
If you’re looking for a home in a specific area, check for nearby homes on For Sale signs and MLS (Multiple Listing Service) ads. This information will help you negotiate for a lower price. You also might be able to come to a deal you can’t get anywhere else.
Make A Bid On The Home
This step might seem obvious, but it’s important to remind yourself that you’re buying a home. You’ll want to have a good idea of how much you can afford before you make a bid.
Be sure to consider your income when you make your bid. You also want to determine whether you can make a reasonable offer. Most homebuyers don’t have much experience making home bids, so don’t be afraid to ask about it.
Make An Offer On The Home
When you’ve decided on a reasonable offer for the home, it’s time to proceed further. Most lenders are willing to take bids, but they’ll want you to get pre-approved for a loan before you begin your bid.
This is so that the lender has an idea of how much you’re likely to be able to borrow. If you really want the home, you might want to overbid. You’ll have to go back to your lender for pre-approval, but you’ll likely get it.
Complete The Closing
You should make sure to talk to your lender about the closing day and which lenders offer this service. You can call the bank for information and plan accordingly. It is critically important to ensure that you’re closing in a safe and timely manner.
For that, check your loan status, get a home inspection done, and obtain home flood insurance before completing the closing. All these will secure your investment and prevent many different risks.
So, having these easy steps to buying a home in mind and doing a little bit of research, you’re sure to find the perfect fit!