Buying a home will most likely be the largest investment you make during your lifetime. The process is exciting but at the same time, it can be intimidating, especially for first-time homebuyers. Family First Mortgage is here to guide you through the basic steps in the homebuying process so that you are prepared when the time comes to purchase your next home.
If you read last week’s blog, you will know what the first and most important step in the homebuying process is. Before you even begin looking at homes, you need to secure financing. This starts with doing a thorough review of your finances and making some projections on what you think you might be able to afford. A mortgage professional here at Family First Mortgage can always give you a hand with this process. We can take an in depth look at your credit score, your savings, your employment history and other factors to predict your ability to repay the loan you are requesting.
Prequalification and Preapproval
Once a mortgage professional has reviewed your finances, you will be prequalified for a loan. Prequalification is rather informal and requires minimal paperwork. A prequalification will give you and your real estate agent an idea of how much you can potentially borrow and a realistic price range for affordable homes. Preapproval is much more formal process in which you will receive a quote for a specific loan amount. A preapproval is only granted after the review of documentation like paycheck stubs, W-2s, and credit scores.
Finding a Real Estate Agent and a Home
Once you have been preapproved, you are going to want to find a real estate agent. You can begin to look for a real estate agent on your own or your mortgage professional can provide you with some local recommendations. With your prequalification, your real estate agent can show you homes in your price range that meet your requirements. Once you find a home you love, you will work closely with your real estate agent and mortgage professional to make an offer.
Making an Offer
Your real estate agent will communicate with the seller’s representative and negotiate the sale on your behalf when you are ready to make an offer on a home. If the seller accepts your offer, the home will go into escrow. This is the first step in finalizing the sale.
Next, the home will need to be inspected. Typically, the offer you’ve already made is contingent on the results of this inspection. This means that if the inspection reveals there are issues that will require money out of pocket to repair, you can ask the seller to make the repairs or make an adjustment to your offer to offset these costs.
Appraisal and Closing
An appraisal will need to be done on your new home before your lender can finalize the transaction and complete paperwork. The appraisal is done to ensure that you’re paying a fair price for the home in the current market. Once the appraisal is complete, closing paperwork will be prepared to finalize your loan. Once the paperwork is complete, the lender will pay the seller for your home, and the home is yours!
Get Started with Us Today
The process of buying a home is unique for everyone but hopefully this gives you an idea of what to expect. Be sure to contact Family First Mortgage in Lafayette, LA, when you’re ready to take the first step toward buying your new home.