7 Steps to the Home Buying Process

There are at least 7 things you must do to win in the home buying process. Winning means getting a fair deal and being satisfied with your purchase. These 7 things should happen after you receive your pre-approval letter.

Avoid home purchase problems

  1. Work with a reputable and referred real estate agent. You don’t want to just work with the seller’s agent to save the seller money. You need an experienced pro that keeps your best interests at heart, knows local property values, and can help in the negotiation process. Since the seller pays realtor’s costs, it makes sense to use a pro.
  2. Create a wish list. Separate your wish list into 2 categories “Needs” and “Wants.” This will help you prioritize what you really should have in your first home and knowing what you could live without if you have to. This will make it easier to eliminate homes or narrow your search to homes that will suit your needs better.
  3. Expand your location search. While you may have your favorite target neighborhoods or school districts to consider, expanding your search can open many opportunities for a bigger property, a safer neighborhood, a less expensive alternative, or other desirable features.
  4. Visit the property multiple times. Homes can look different at different times of the day. Higher traffic on the streets, increased surrounding noise, and other issues may happen at different times of the day that may dramatically affect your lifestyle. Make sure you would like to live there at all times of the day.
  5. Make an attractive offer. Don’t kill your chances of getting that perfect fit home by low balling an offer or being difficult about a few thousand dollars. Over a 30 year loan period, a few thousand dollars is literally a handful of dollars more per month. Instead, make a fair offer for the property. Your realtor can help you. A fair offer coupled with a pre-approval letter will dramatically improve your chances of getting the seller to accept your offer.
  6. Select a reputable home inspector. You will see this tip repeated in other videos and content on our website. You must pay for an inspection to protect yourself from buying a home with structural hazards and expensive repairs. In case your seller is unwilling to pay for needed repairs, you will want an escape clause in your initial agreement that will allow you to back out of the deal. Your real estate agent can help you with this.
  7. Lock in Your Rate ASAP. Once you have selected your home, lock in your rate. You can lock in your rate up to 5 days before your closing. Get the rate lock in writing with a reasonable expiration date, one that won’t expire before that closing. Your mortgage broker will work closely with you on this one.

Doing these 7 things will ensure you are making a reasoned choice in the home you choose. They will also help you and your offer be attractive to the seller. And finally, they will help you protect yourself and minimize your costs.

We’d love to help get you into your first home, happy and satisfied. Give us a call at 801.542.0961 or fill out our quick & easy pre-qualification form!

Home Loan Pre-Approval: Your Secret Weapon

A pre-approval letter is an official document from a lender that lets the borrower know you are serious, you can get the money, and that the closing process should be smooth and fast. This letter can be shown to sellers at the appropriate time to show the specific mortgage amount they are approved for. These are all things the seller would love to know up front, making it easier for them to accept your offer on the home.

Home loan pre-approval

Pre-approval vs. pre-qualification

A pre-approval is different from a pre-qualification. A pre-qualification simply looks at your income, debt and assets. A lender can give you a very rough estimate of what you might be able to afford. At this point your credit score and history, employment history, and other factors have not been considered yet.

Complete a loan application

A pre-approval occurs after a complete loan application has been completed. An advantage of going through a mortgage broker for this process is that the broker has many more options available to them to match the best loan possible to your situation. Banks and other institutions are often limited by the loan products they offer internally. A mortgage broker literally shops the nation, often beating what the banks and other institutions can offer.

Advantage over other home buyers

As you shop for a home, you may encounter many sellers who started the loan process with other buyers only to learn later that the buyers could not qualify for the loan. Oftentimes, sellers need to sell their property quickly at a fair price. Any delays could be costly to them. Armed with your new secret weapon in hand, your pre-approval letter, sellers will entertain your offer as one with less risk. This can also give you a huge advantage when there are competing offers on the same home.

Your mortgage broker can help you get a pre-approval letter by having you complete a loan application. You can go to IntegrityLending.com and start the application process online.

We’d love to help get you into your first home, armed with a secret weapon.

Get Your Pre-Approval Letter by Starting Your Application.

Start Your Application Now

Attack First-Time Home Buyer Challenges with Confidence

Not knowing what you can afford can be a major stumbling block as you try to navigate through the home buying process.

Hand of the businessman with the house

Know your credit score

Buyers can be best served by finding their current credit score, cleaning up any negatives on their credit report, keeping account balances below 30% of their limits, saving enough for a larger down payment, and by getting pre-approved for their loan. Doing these things will maximize your borrowing power while minimizing your interest rates and other costs.

Know your home buying expenses

Many first-time buyers will casually look at their budget, guess how much of a mortgage payment they think they can afford, and then calculate the size of loan they want to go for, based on that monthly payment amount they calculated. The problem with this is first-time buyers often do not anticipate the additional expenses that go beyond the down payment.

These expenses may include an earnest money deposit that keeps the buyer from seeking other offers while you are negotiating and waiting for processes. An earnest money deposit may be as much as 3% of the purchase price. Let’s say the purchase price of the home is $200,000. A proper earnest money deposit may be $6000.

Closing costs of the loan are typically 2-5% of the purchase price. On that same home, the closing costs could be between $4000-$10,000.

Expenses may also include any prepaid interest and upfront escrows for property taxes and homeowners insurance. These can be in the hundreds to thousands of dollars each.

Expenses can include ongoing monthly homeowners’ association (HOA) fees. HOA fees often range from $200-$400 per month.

You should include an inspection for around $500-$800, and appraisal fees which could be at least a few hundred dollars.

Have cash reserves

While it’s not required, another good rule of thumb is to have 2-6 months of cash reserves equal to the new house payment. This is for unforeseen incidentals like repairs, home improvements, and temporary loss of income.

Armed with the knowledge of these extra expenses, and knowing that you have prepared for each one of them, will help you search for a house you can afford, make a proper offer, know where you can negotiate, and could end up saving you a lot more money.

Seek advice from a professional

As with any challenge that might arise, get more information, seek the advice of a professional, and prepare yourself with confidence.

We’d love to help get you into your first home, paying as little as possible.

Are you ready to ask some questions and talk about the possibility of buying your first home?

We’ll be here for you every step of the way. Give us a call at 801.542.0961 or fill out our quick & easy pre-qualification form!