Buying a home is an important investment for anyone. This major step requires you to do some homework to ensure that you can complete the process and ultimately afford your purchase. As you begin to look at properties and evaluate your finances, be sure to keep these important home-buying steps in mind.
💯 What Credit Score Do I Need to Buy a House?
Before you get out there and begin to house hunt, it’s important to see where things stand with your credit. Unless you intend to pay for the entire cost of your home at once, you’ll need to find a bank that will finance your purchase. The first thing that a bank tends to examine is a potential buyer‘s credit score. Minimum credit scores are associated with home loan types. If your credit score is 550 or below, the bank is going to see it as bad and would certainly hesitate to give you a loan. A fair credit score is around 650, while a score of 750 or above is regarded as excellent. For a conventional loan, your credit score typically needs to be at a minimum of 620. To qualify for an FHA loan, you’ll need at least a credit score of 580.
💰 How Much Money Should I Save to Buy a House?
Traditionally, lenders have encouraged buyers to have a down payment of 20% of the home’s price tag. Consequently, the price of the home is going to determine how much you need to save for a down payment. Of course, some buyers put down as little as 3.5% on their home purchase. Just keep in mind that the amount you put down is going to affect your payment. Interest rates aside (and these can vary), the more you put down, the more you can reduce your payment. On the other hand, some people prefer a larger home payment to pay off the home sooner and avoid paying as much interest as possible.
👥 Finding a Real Estate Agent to Buy a House
With the right real estate agent working on your behalf, you can generally expect a smooth buying process. Many house hunters look for references before contracting with a realtor. It’s important to work with a real estate agent who is experienced and reputable. Follow some common-sense tips when you look for a real estate agent like checking for licenses and disciplinary actions, making sure they know the area you’re interested in, and viewing their current listings. If you have family or friends who recently worked with a real estate agent, you might want to work with that agent too. If that agent isn’t familiar with the area you’re considering, ask if they can recommend someone who is.
How Do I Make an Offer on a House?
When you work with an experienced real estate agent, you can expect to be walked through the offer-making process. Assuming that you’ve been pre-approved and have a budget in mind, you will make a written offer to the seller when you decide you want to buy a home. The seller may accept that offer or make a counter offer. They might even decline your offer and accept another buyer’s offer. If the seller does make you a counter offer, you’ll need to decide if you are prepared to pay it and it suits your budget. If the seller declines your offer, you can still put another offer in writing. You can also continue to search for a different property. Your real estate agent will be able to help you put your offer in writing.
🤝 What Happens after an Offer Is Accepted on a House?
If your purchase offer on a house is accepted, you can breathe a sigh of relief. However, don’t break out champagne yet. There is still considerable work ahead of you. In most cases, you’ll need to have the home inspected. A home inspection is important as it can turn up major problems like an unsound foundation, a faulty electrical system, or an outdated plumbing system. For some types of loans, a lender may not release funds for a home that doesn’t pass its inspection requirements. Depending on what the inspection uncovers, you might want to rescind your offer or renegotiate the price tag. Discovering that major repairs are needed is often a valid reason to renegotiate a real estate deal.
✍️ Sign Off on the Deal
The last step, of course, is finalizing the contract. Before this can happen, your real estate agent and bank will have a stack of paperwork for you to sign. Your lender will need to verify your income and place of employment. Once all the paperwork is complete, you wait for your closing date, so you can sign the final contract and make your purchase.
Because purchasing a home is a major investment, it’s important to take your time to research real estate agents, neighborhoods, and properties. A great agent can explain the buying process to you and help you find the home of your dreams as well as a home that you can afford.
Your real estate agent is the best source of information about the local community and real estate topics. Give Simmsational Real Estate Group a call today at (954) 709-8258 to learn more about local areas, discuss selling a house, or tour available homes for sale.