The Path to Homeownership
I get asked all the time, "I want to purchase a home later this year, where do I start?"
SO let me breakdown the pathway to purchasing a home in a pretty simple way for all my peeps out there that want to be smart and buy a home this year!
First,
Save for your downpayment.
Create a budget, stick to it, and save some money. Do your research, though, because you don't need to have 20% saved to used as a down payment like a lot of people believe. There are plenty of down payment options with different types of mortgages out there.
Second,
Know your credit score.
Know what it is, and how you can make it better. Do you need to get rid of that debt collection? Yes. Do you need to probably pay down some of your credit cards? Yes. Do you need to pay off your car? Maybe! These things matter. Lenders look at how much debt-to-income ratio you have when qualifying you for a mortgage. Debt is not bad, but it does come into play when purchasing a home.
Third,
Find a Realtor.
Contact a local, real estate professional to guide you through the process from here. And guess what? They are free for buyers! Sellers pay your buyer's agent commission.
Fourth,
Get pre-approved!
Your Realtor will have some lender contacts for you, or maybe you know someone in the industry. They will dive deep into your finances and qualify you for a mortgage amount that you can afford.
Fifth,
Find a home.
Your Realtor will do custom searches based on your wants and needs and find homes that meet that criteria. In this market, see them fast and act quickly. Homes are flying off the shelves!
Sixth,
Make an offer.
Your Realtor will take care of the contracts and giving you all of the details of what goes into an offer. But you need to decide what you can offer to purchase this home for based on your personal situation and abilities.
Seventh,
Get a home inspection.
This is to address any concerns or let you know of any defects or potential hazards in the home! You usually get an inspection in your due diligence period after your offer is accepted by the seller. During your due diligence period, you have the option to back out of the contract without any penalties if maybe something pops up on the inspection that you don't like.
Eighth,
Get a home appraisal.
Your lender will order this for you. An appraisal is what your homes is valued at, and gives you the amount the bank will loan you. For example, if you are purchasing a home for $400,000, but the appraisal comes back at $375,000, your lender will not loan you more than what the home is worth. You will either need to come out of pocket that difference, or renegotiate with the seller. If the home appraises for more than what you are purchasing the home for, hell yeah! you just made quick equity in your home.
Ninth,
Close the sale.
Your lender will have been taking your loan all the way through underwriting. Your Realtor will be taking care of the behind the scenes paperwork. And they will all schedule the closing day with you! On closing day, you will sign a lot of papers promising to repay your mortgage, promising that you are going to own the home, and then you will get your keys.
Tenth,
Move in!
Congrats! You are now a homeowner.
While there are a lot of details that go in between all of these steps, you should be working with a knowledgable lender and realtor to guide you through the process. It can be that simple! Homeownership isn't out of reach like a lot of people think it is, and it can happen for you! If you are in the North GA area and are thinking about purchasing a home this year, reach out to me so we can get you on track!
