Do you dream of owning your own place? If you’re a hopeful homeowner who’s thinking about starting your buying journey, being prepared for the mortgage process is key. By understanding what to expect, you can avoid nasty pitfalls and delays that could knock you off course to your new home. Here’s a timeline of the typical mortgage process.
Start to Save
Sock away as much cash as possible every month, even if you don’t plan on buying for a year or longer. Since some mortgage loans require 20 percent down, you’re going to need a chunk of cash to get into a home. If you can’t save that much, there are loan programs, like FHA, that only require 3 percent down. Still, it never hurts to have a stash of money.
Craft a Budget
It’s important to settle on an amount you can pay for a home early in the process. This requires taking a long, honest look at your income, monthly bills, and credit card and other debt. Calculate how much you can spend for a monthly payment, taxes, and insurance. Be realistic in what you can comfortably afford.
Meet with a reputable mortgage lender and tell them your plans. Based on your financial picture, they’ll be able to tell you how much of a mortgage you can qualify for. Conventional, adjustable, or jumbo loans, the lender can explain all of them.
Make a List
Although you may have a long list of features that would be nice to have in your house, it’s important to decide on four to six amenities that are must-haves, and focus on getting those.
Start Your Search
Use your criteria and start searching for a home online. Now is the perfect time to engage with a real estate agent to assist you in finding your dream home. This step can take a week or a few months, depending on how much time you spend looking, the inventory of homes, and how easy you are to please.
Negotiate the Deal
When you find the home you want, move quickly and listen to your real estate agent about what to ask for and what to concede. This step typically takes a few days, depending on the number of other buyers involved and how agreeable the seller is.
Bring in the Experts
When your offer is accepted, it’s time for the appraiser and the home inspector to examine the property. A title search is also needed. Your lender will move your loan into underwriting.
Schedule Your Closing
As your mortgage loan moves through the pipeline, you need to get ready for closing. This step can take a few weeks. Your lender will keep you informed of the timeline. Go to closing prepared to sign your name several dozen times.
Pack, and Pick Up Your Keys!
Congratulations, the home is all yours!