The First 5 Steps in the Home Purchase Process2/07/2011 If you’re a first time home buyer, you may not be aware of all the steps involved in the home purchase process. We’ve put together a two part series that covers ten of these steps. The first five are outlined below. Not all of these steps are intuitive, but they’re all important and necessary. 1. Save for the down payment. You’ll need to get started on this as early as possible. Depending on your financial situation, it may take years to save enough money for an adequate down payment. If you have no money in the bank, you probably shouldn’t try to purchase a home. 2. Check your credit. Make sure you know what your credit score is before you apply for a mortgage loan. If you don’t have a high credit score, you won’t qualify for the lowest mortgage rates available. 3. Make a budget. Take stock of your financial situation and plan for the future with a budget that takes into account your estimated new mortgage payment. If you skip this step, you may find yourself in over your head with a mortgage you can’t afford. 4. Pick a real estate agent. This is an important step in the process. Find a real estate agent with experience in your local area. Ask for referrals from friends or get information from websites such as this one. 5. Pick a lender. This is arguably the most important step of all. We think so, at least. The lender you choose will determine the mortgage rate you get, the down payment amount you’ll have to make, the loan type you choose, the closing cost you pay, the speed at which you’re able to close the deal, and many more factors that will have significant financial repercussions on your life for the next few decades. Make the decision wisely. Contact as many different lenders and brokers as possible to get a n idea of what your options are. This is the best way to get started on a home loan. Tomorrow, we’ll discuss the next five steps in the process. |
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