The Home Buying Process
Buying a home is a big responsibility. Where do you start?
Shopping for a house may not be the best place to begin. Here are some suggested steps in the home buying process to help you get started:
- Check your credit report and scores
- Get pre-qualified for a mortgage by speaking with a loan officer
- Find a real estate agent
- Shop for a home
- Make an offer
- Apply for a mortgage by completing documents provided by your loan officer
- Once your mortgage is approved, get an appraisal, home inspection and other necessary certifications
- Prepare for closing and make a moving checklist
- Attend closing
- Move in
Check Your Credit
Your credit score is based on several factors, including how much debt you have, your credit history and whether or not you pay your bills on time. Your credit score can affect whether or not you’ll meet the requirements for a mortgage loan and, if so, what types of loan programs you will qualify for.
You can find out about your credit score by obtaining your credit report:
- You can get one free credit report each year at www.annualcreditreport.com; read through it carefully and make sure there are no mistakes, as that could affect your score
- If you have already obtained a free credit report within the last 12 months, you may have to pay a fee to obtain your credit score
Freedom Mortgage can help you determine how much you can afford to pay on a mortgage. We will ask you information about your specific financial situation and give you a written pre-qualification. While a pre-qualification estimate is not a guarantee to lend, it does help you set your price range, your budget, and how much you can put toward a down payment.
Find a Real Estate Agent, Shop for a Home, Make an Offer
When you are pre-qualified for a mortgage, you are in a stronger position to shop for a home because you will know your price range. Also, when you make an offer to buy a home, it’s likely the seller will take your offer more seriously because they’ll know that you’ve done your homework by estimating how much you can afford.
- Whether you’re moving to a new location or just across town, you may want to contact a real estate agent who is familiar with the area
- Your real estate agent will appreciate the fact that you are already pre-qualified for a mortgage
When you are shopping for a home, you may want to consider not only the price and location but also the school systems, safety of the neighborhood, and access to services such as medical care. Once you select a property, you will make an offer and negotiate with the seller on a final sales price.
Apply for a Mortgage
You can apply for a mortgage once you have selected a property. While you can get pre-qualified just by speaking with a loan officer on the phone, the actual process of applying for a mortgage requires reading, signing and supplying a number of documents.
Freedom Mortgage wants to make the mortgage process as easy as possible. We recommend that you review our Application Checklist and start gathering the documents you need as early as possible.
Get an Appraisal
If you are working with a real estate agent, they may recommend service providers for an appraisal, a home inspection and other certifications. You will be given a list of services that need to be done in order to close on your loan. Here are several examples:
- An appraisal is a written report showing how much a property is worth
- A home inspection may discover problems affecting the safety or resale value of the property; if this occurs, the seller may be required to make repairs
- If you choose an FHA loan, an FHA appraiser must confirm that the property meets FHA standards
Freedom Mortgage can help you through this process to get you to closing as fast as possible.
Prepare for Closing and Moving
Once your offer has been accepted by the seller and your mortgage has been approved, you can begin to prepare for your move by reading our Moving Checklist. Next, get ready for closing. This is the final step in any real estate transaction.
How Should I Prepare for Closing?
First you should know one of the biggest risks to closing on time is a change in a borrower’s financial circumstance. You may want to avoid opening a new credit card account, buying a car or making any other large purchase prior to closing.
Then you should start making sure you have all the documents you need to bring to closing:
- Government-issued photo ID for borrower and co-borrower
- Cash necessary for closing costs (typically a cashier’s check; not a personal check)
- Binder for homeowners’ insurance (hazard insurance) and paid receipt
- There may be other items as well
Although closing may only take an hour, consider setting aside extra time. There are many documents to sign. Your closing agent will explain what you are signing and you will have the opportunity to ask questions.
The borrower and any co-borrowers attend closing in person. Other people at the closing table may include:
- A closing agent (also called a settlement agent or escrow agent)
- The title company representative
- The seller and any real estate agents involved
- In some instances, an attorney
Learn more about closing. You can rely on Freedom Mortgage to guide you through the closing process.
Keep our Moving Checklist at hand to make sure you haven’t missed any Moving Day to-dos. You’ll feel great when you get your keys and unlock the door to your new home. Congratulations!