While there is no “one-size fits all” approach to buying home, you’ll discover that all homebuyers have a few critical steps that they need to take on their transition to homeownership. Even in today’s landscape, where COVID-19 and social distancing have increased the reliance on virtual technologies—the key steps of your journey will likely remain the same. To help you get started, we’ve put together the following homebuying checklist.
Step 1: Understanding what you can afford
Before buying a home, you’ll want to understand your financial situation so you can properly budget for your home. Take inventory of your finances, including income, debts, savings and your monthly expenditures to assess how much you can afford.
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Step 2: Down payments and PMI
Most people don’t realize that you have options when it comes to making the down payment on your home purchase. You'll want to talk with your lender about what makes the most sense for you, but qualified borrowers can put down as little as 3%. Don’t fall for the common 20% down misconception.
Step 3: Assembling your team
It’s important to have the right people by your side when you’re ready to buy a home. Consider reaching out to a housing counselor, real estate agent and lender to help you achieve your homeownership goals.
Step 4: Finding the right home
Be clear about your wants, needs and deal breakers before you get started on your house hunt. Work with your team to find a home that will best suit your lifestyle and finances.
Step 5: Working with your lender
Your lender will play a critical part in helping you determine how much home you can afford in addition to securing you the best mortgage option for your needs.
Step 6: Making the offer
Once you've found the right home, your real estate agent will submit an offer letter. Learn how to determine a fair price and negotiate within your budget.
Step 7: Inspection and appraisal
Before you start the closing process, your team will likely schedule a home inspection and appraisal. These are important steps as both will give you a better understanding of the condition and value of your home so you’re informed before the keys are transferred to you.
Step 8: Closing your loan
Once you loan is approved your lender will schedule the closing which is the final step in purchasing a home. During closing, all mortgage documents are signed, and the property is legally transferred to you.
As you can see, there are many variables in the homebuying timeline. While there is no simple answer to what your homebuying journey will look like, the more educated you are the more likely you'll be able to streamline the process.
Follow our along as we take an in-depth look at each of the 8 homebuying steps in our upcoming blog series.
If you are looking for guidance on your home journey, visit My Home by Freddie Mac®.