The Process in Buying a Home

Buying a home is taking on a major commitment. When you take on this commitment you begin building equity. This is done every time you make a mortgage payment. As a new homeowner you are also setting aside money for your future. It contributes to many Americans as retirement savings. Pride in ownership also builds wealth as your property value goes up.  You settle into a community and make friends.  Owning a home sets an example for your children. It brings together a family and shows responsibility in maintaining a home whether it’s planting a garden, mowing the lawn, etc. Another added feature to owning a home is getting a tax deduction and mortgage deduction. Now that you have decided that you are ready to buy a home, you ask what is the process in buying a home?

The first step is to calculate how much house you can afford. Remember you don’t want to be house poor. Save for your down payment and closing costs. Down payments can be 3-5% for FHA loan and for conventional you will need 10-20%. It is important to also mention that if you put less down for your down payment a buyer will have to pay PMI (Private Mortgage Insurance). If you are looking to purchase a COOP expect to put down 10-20% and you have to show a good credit score of 720 or better. Reviewing the application for COOP building is recommended as well as providing your lender with a financial statement. Your closing costs will be 2-4% of the sale price of the home.

The next important step is to get pre approved. In today’s market agents are required to obtain a pre approval before entering into a home to view. A Covid-19 Disclosure is also another requirement that will be asked of buyers agreeing that they will adhere to the safety guidelines. This is also a good time to get to know your lender. Ask what the fees will be in buying your first home?

Now that you have your pre approval you are ready. Many buyers begin by searching online. They look at websites like, Zillow, Trulia, Homesnap, realtor.com, etc. You may also be referred to an agent by asking your lender, friend or family member for one.

Once you’ve gotten your feet wet and you found the perfect home you are ready to make an offer because you’ve prepared yourself. You’ve spoken to your lender who has pulled your credit report, has figured out your Debt to Income and what you can afford. This is important because in today’s market you may get into a bidding war. It’s always good to look at homes below your pre approval limit and have some flexibility when you enter the home. You want to look at costly items needed like a new roof, mechanicals, windows, etc. These are things you need to consider.

It’s go time! Your offer was accepted! You are excited! What to do next? Hire a professional inspector.  Your agent can help you with this. Your inspector will give you a detailed report about the home. Your inspection can cost you anywhere from $750 or more. Also start working on an RE attorney. This is also someone your agent can recommend to you. This time is also a good time to start pricing homeowners insurance.

Next, buyers and sellers sign. Your agent will draw up another memo and send it to your lender and attorney. It is important to not draw out the process and sign contracts as quickly as possible. Once, the lender receives the contract the process becomes formalized as the loan is disclosed. Here the lender can order an appraisal. The turnaround time for an appraisal is 10 to 14 days. Sometimes sooner.

Once the file is complete it goes into underwriting and either bank will hold the loan or outsource it. A commitment is issued with conditions. Sometimes the title is ordered here but lenders will strongly encourage attorneys not to wait and do it here. This is because if the title is ordered early and something may happen with the deal and you will still get charged a fee but there are companies that your agent can recommend that if something were to go wrong that title pull that was made is no charge to you.

Finally, the commitment is then cleared and the buyers attorney here notifies the sellers attorney and you are clear to close for a scheduled closing date. Typically on the closing date or the day before you will do a final walk through with your realtor of the property.

Your journey will have its ups and downs. Ultimately your goal is to work with a great agent that will help you along the way and understands you and the criteria you need in a home. Ultimately, my goal is to provide you with a stress free experience. If you are looking to buy a home then it’s time that we meet. I’d be happy to assist you in your journey.

Give me a call today!

Website: https://annahawley.randrealty.com/
Facebook: https://www.facebook.com/annahawleyrealtor/

Licensed Real Estate Salesagent

Howard Hanna | Rand Realty

342 Downing Drive, Yorktown Heights NY 10598

914 498 6060

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Proudly working with satisfied buyers and sellers in Westchester, Putnam and Dutchess County Area.