Many of us dream of the day we get to own a home of our own. We may even set goals for ourselves in order to reach home ownership by a desired time. But not everyone is familiar with the home buying process. 

Let’s get you familiar & on track to home ownership because there are a few steps that need to be taken in order to get you one step closer to your goal! 

1. Check Your Credit Score 

First, you want to make sure you are eligible and in a position to purchase a home. Take some time to work on your credit score before taking any further steps. Your credit score can have a significant impact on whether you qualify for a mortgage, how much you qualify for, and what your interest rate will be. If you have a low credit score, you can improve it by paying all of your bills on time, paying off debts, and keeping your credit card balances low. There are also tons of valuable videos on Youtube that provide tips on how to improve your credit score.

2. Determine How Much You Can Afford 

While working on your credit score you should also determine how much money you need to save in order to attain your dream home. What can you afford? And how long will it take you to save that specific amount? This step will require you to budget and track your expenses. Nobody said the process to homeowner ship would be easy! Below I will list some expenses you should consider. 

-Down Payment: The amount you put down for a home will be determined by the purchase price of the home and the specific mortgage loan you select. Depending on the loan you choose you will put anywhere from 20% down (conventional loan) to 3.5% down (FHA loan). Let me give you a quick example: Let’s say you purchase a home for $500,000 and you opt to use a FHA loan which is typically used by first-time home buyers. With 3.5% down your down payment amount will be $17,500. 

-Closing Costs: Closing costs are paid towards the end of the purchase of a home. This fee can range from 2% to 6% of the total loan amount. Although a portion of this price can be negotiated and paid by the seller, it is best to prepare to pay the closing cost amount in its entirety. Using the example above, in that scenario the closing cost can be anywhere from $10,000- $30,000. 

-Move-in Expenses: Although you may purchase a move-in ready home, you never know what can happen! Save for any repairs, renovations, and remodeling. Not only do you need to consider those expenses but also the cost of furniture, appliances, household necessities, decor, and much more! My advice is to start buying these items now and store them away to avoid a hefty bill on household necessities. 

-Other Household Bills: It is important to consider other bills you will be paying once you move into your home on top of your monthly mortgage. These bills include: property taxes, home insurance, utilities, Internet/ cable. And a few other bills depending on your specific home and needs.   

On my website I have a mortgage calculator, use this to play around with different numbers to get an idea of what you can afford. 

-Link to Mortgage Calculator: https://irisperez.jhagents.com/mortgage-calculator 

3. Pick a Lender & Get Pre-Approved

There are various lenders to pick from, it is important that you shop around and find one that is right for you. I have lenders that I specifically work with that I can recommend to you if desired. Once you choose a lender it is important to get pre-approved. The pre-approval process is an investigation on your finances that include verifying your income, assets, and credit rating. This essentially guarantees you’ll be able to attain a loan assuming your finances don’t change between the time of approval and the closing of the home. A pre-approval is also significant because it tells you exactly the amount the lender is willing to loan you and specifies the costs of obtaining the loan. That way when you are out shopping for homes, you know exactly what your price range is. It also proves to the seller that you are serious about buying a home which is huge when they are reviewing offers submitted. 

4. Find the Right Real Estate Agent

Your real estate agent will represent you through the entire process so it is crucial that you select someone who is trustworthy and reliable. Interview a handful of agents and pick the right one for you. Remember the home buying process should be fun and exciting, hire the agent who will ensure that experience! 

5. Start the House Hunting Search! 

 Once you select your agent and meet with them to discuss exactly what you are looking for in a home. The house hunting will begin! Keep your priorities in mind and have fun! Your agent will be right by your side through the entire process, there to guide you and accompany you. Do your research and don’t settle. Some things to consider: size, style, neighborhood, nearby schools/stores, condition, additional fees (HOA & Mello-Roos), your work commute, and much more.  

6. Make an Offer, Inspections, and Appraisal  

At this point you have found the perfect home and are ready to make an offer! Your agent will be there to guide you on the offer price and any contingencies you would like to include or waive in order to make your offer stand out against competing offers.  Assuming your offer is accepted, a home inspection and appraisal should be arranged to better know the condition and value of the selected home. 

7. Closing on Your New Home!

Once you are informed of the condition and value of the home you can then proceed with the final walk through. The final walk through takes place a few days before closing and it is intended to help you as the buyer to ensure all agreed-upon repairs have been fixed before the closing purchase of the home. 

Congratulations! You have now made it to the final step, now you will sign your life away in paperwork and pay your closing costs. Once completed, you are officially a homeowner! Welcome Home! 🏡🥳

If you have any additional questions please call, text, or email me! Remember I am here to help YOU ❤️

(805) 827-0782 email: iris.perez@jhagents.com