Heather cooksey real estate

How to Prepare To Buy A House in 8 Steps

When preparing to buy a house – don’t hesitate to start preparing.  The earlier you start, the better off you will be on your home buying journey. 

Even if you’re ready to buy now and you’ve already done most of the steps that you should take to get started – it’s good to look over these items to make sure you didn’t miss a crucial step in the process.

I’ve narrowed this down into 8 Simple Steps: 

1. Put Money Aside

2. Lower Your Debt To Income Ratio 

3. Hire A Realtor

4. Speak With a Lender

5. Follow Lenders Guidelines on Necessary Improvements

6. Get Pre-Approved 

7. Determine Your Budget and Location

8. Prepare Money for Deposit and Inspections / Appraisal

In The Early Stages..

Even if you are a year or more out from buying a home, there are many ways you should be getting started right now to be well prepared for whatever the housing market throws at you.  

1. Put Money Aside 

You should never walk into the home buying process with out starting the process of creating a “nest egg.”  Home buying involves many expensese that you might not have anticipated.  So it’s best to be fully prepared. 

How much you need to put aside depends on what loan programs you can qualify for and the current market conditions.  Here are a few examples :

  • You may qualify for a no money down loan, or a loan that requires 3.5% down, so preparing funds now will help you meet these qualifications.
  • Closing costs can be negotiated into the sale, but in a sellers market you may have to pay some of these out of pocket.  Closing costs can range from 3-5% of the loan amount. 
Click here for a link to an article that breaks down some options of basic loan programs that most lenders will provide. 

2. Lower Your Debt To Income Ratio

This is important to assure you are well prepared for all of the expenses of homeownership, and helps you with your options for certain loan programs.  Ways to start doing this in the beginning are:

  • Put aside $100 each week to pay down debts
  • Pay off more than your minimum balance on credit cards each month.
3. Hire A Realtor 

Finding a home can look like a very intimidating and out of reach process.  This is why you should research and hire a quality agent in the early stages of home buying who is willing to walk you through all the steps of purchasing a home. 

To find a good Realtor, most rely on the word of mouth from their friends and family – but I always suggest doing your own research.  Find an agent who has a solid online presence and evidence of sales and reviews to back up their claims of how they do business. 

It’s not always in your best interest to hire your moms, cousins friend who has helped them buy and sell since the 1970’s.  Find an agent who is a good fit for you and your own personality.  

Click here to set up a no obligation phone call with myself if you are looking in the MD, or VA area.

4. Speak With a Lender

A lot of folks who are in the process of trying to buy a home think you should speak with a lender before you even think about calling a Realtor.  While this seems like it would be good advice, it isn’t. 

If you hire the right agent, they will have recommendations for high quality lenders who have good rapport in the area with other local agents.  

This is CRUCIAL especially in a sellers market to work with a lender who can get the job done, and who listing agents trust and can speak positively about when presenting an offer to their seller. 

The right lender will also walk you through anything you may need to do to improve your credit, DTI and other things and will give you guidelines on what to do financially for the next few months until you are ready to buy. 

5. Follow Lenders Guidelines On Necessary Improvements

As mentioned in the previous paragraph, a quality lender will look at your financial situation and help you find the quickest, easiest way to get you in a position where you are ready to buy a home – and can qualify for the best possible loan programs in your area of choice.  

Take the advice of your lender and follow their guidelines meticulously until you reach your credit score and DTI goals. 

Now you're ready to start house hunting...

After you’ve completed some of the items above, you are finally ready to move into the real stages of house hunting.
6. Get Pre-Approved
After following your lenders guidelines, they should be able to provide you with something called a pre-approval letter.  This will be your golden ticket into viewing properties in your area. 
Even if your pre-approval states you are qualified for example for $600,000, maybe you want your monthly budget to be on a smaller scale.  That takes us into step #6. 

7. Determine Your Budget and Location

Your lender can run numbers for you to decide how much you want your monthly payment to be. 

After deciding where you want your monthly payment to stand – work with your agent to finalize your location of choice, and all the criteria you need in a home.  You may have to narrow it down and be flexible with some items depending on your price range.  But your agent will help you meet as many of your “must haves” as possible. 

Run a quick home search here to see what’s available in your area. 
8. Prepare Money For Deposit, Inspections and Appraisal
When you find a home of choice, make sure you have funds available to be used for what is called an Earnest Money Deposit, Your Home Inspections and Appraisal. 
The Earnest Money Deposit is a good faith deposit that you are willing to put on the line to show the seller that you are serious about purchasing their home. 

 Sometimes you can put down a higher amount if you are in a multiple offer situation and want to stand out.  This then applies to your down payment or closing costs once you reach the settlement table, or is returned to you if the contract falls through.

Inspections and Appraisal together can range anywhere from $500-$2,500 depending on if the home has a well and septic that needs inspected.  

The Home Buying Process Move’s Quickly So Being Prepared Is Key.

Be sure you hire a high quality Realtor who is familiar with your local market and works quickly and efficiently.  Your agent represents you through this entire transaction and is your number one advocate – So working with the right one is key to your success in homeownership!

Thanks for reading.

xoxo Heather Cooksey Real Estate

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