Buying a home may be the largest financial decision you'll make in your lifetime. It can be stressful, but it doesn’t have to be. What can make the homebuying process more seamless? Having a solid plan -- and sticking to it! These 10 steps will help you prepare for and go through the homebuying process so it can be easier and more enjoyable for you and your family.
- Research potential homes and make the decision to buy
There are different ways you can arrive at wanting to buy. Perhaps you’re tired of constantly moving or spending money on rent. Maybe you have found a desirable neighborhood to raise a family. Have financial planning or estate reasons made it necessary? Regardless, there are many benefits to owning a home. As soon as you can, start researching real estate listings, agents and lenders.
- Find a mortgage lender and real estate agent
You may know someone in the real estate or mortgage industries and are sure of who you want to help you throughout your homebuying journey. You may have to research a bit or ask family and friends for recommendations. Whichever the case, make sure you find someone you feel comfortable working with. Check out their reviews online, if possible. Both of these partners should be experts in the industry, and more importantly, be able to easily explain the homebuying process and answer your questions in simple terms.
- Check your credit
Before your lender checks your credit score, you’ll want to do a review of your own credit report. You can get a free credit report every 12 months through annualcreditreport.com. Know that the higher your credit score, the lower interest rate you’ll typically receive. If you’re trying to improve your score, take note of some of the factors that affect it, like credit payment history, total debt and new credit.
Atlantic Union Bank offers a resource called Savvy Money for all our existing customers. It’s an easy way to check your credit score and is a useful tool to see how you can improve your score.
- Get Pre-Approved
Unless you’re buying a home with all cash, getting pre-approved will give you an understanding of how much a lender is willing to let you borrow. As a result it will also give you a sense of price ranges when looking for your new home. When getting pre-approved, your lender will calculate your debt-to-income ratio and review income documentation including, assets, debts and your credit history. You’ll receive an official pre-approval letter, which shows sellers that you’re a serious buyer.
Atlantic Union Bank offers pre-approval options including, our Certified Buyer Pre-Approval Program where we fully underwrite your loan to determine how much you can be approved for by verifying your information and documentation. With this program, you can compete with cash buyers and close in as little as 10 business days after pre-approval.
If you're ready to be pre-approved, click here. Just fill out the brief questionnaire, and an experienced Mortgage Loan Officer will reach out to you.
- Start looking for a home
Once you’re pre-approved, you’ll know how much you can afford. Preview neighborhoods, styles and surrounding amenities, then set appointments to see homes with your agent that meet your criteria. Everyone has their "must-haves," but try to stay flexible — you might have to adjust your criteria as your home search continues. For example, you may decide it’s worth sacrificing an extra bedroom to be in your desired neighborhood. Many people use online resources to look for homes. When doing so, adjust your search parameters to include the loan amount you’ve been approved for to only see houses in your price range.
- Make an offer
When you find the house you like, be prepared to make an offer. Your agent will know what to do. Have them write an official offer for the home and submit an Earnest Money Deposit along with it. Your agent and the seller’s agent will communicate back and forth (usually over 24-48 hours). If your offer is rejected, re-evaluate with your agent and start over.
- Offer acceptance and home inspection
Once your offer is accepted, typically within five business days, you will set a date for your home inspection – if you choose to have one. Usually, the inspection is scheduled within a week of the contract being signed. Review the home inspection and negotiate minor repairs to be completed by the seller. This is where you’ll work with your real estate agent to address any issues. If major, non-cosmetic issues are found, you can reopen negotiations, requesting that the seller pay to fix the issue prior to closing or provide you a credit so you can fix it on your own after closing.
- Secure your financing
Even if you’ve been pre-approved, you still need to take a few additional steps to officially submit the mortgage application.
Loan application: If you decide to officially apply for your loan with the same lender that did your pre-approval, they’ll already have some of the required documents needed to submit your loan application. If you decide to move forward with a different lender, they will tell you a list of documents they need in order to complete your application.
Appraisal: Your lender will hire an appraiser and your real estate agent will work with the seller’s agent to schedule the appraisal. You and your lender will receive the appraisal report which shows you the appraised fair market value and comparable properties that were used in their calculations. The appraisal will either match your offer, come above your offer price or come below, and your lender will help with next steps.
- Final underwriting/loan details and closing
At this point in the loan’s journey, the appraisal and title work are reviewed, along with any remaining items that may have been postponed during initial approval. Closing dates are then confirmed with the attorney/title office, and the loan is officially cleared. Three days prior to the official closing date, you’ll receive a ‘Closing Disclosure’ from the lender. You must review to check for accuracy and confirm receipt.
- Close and move!
On closing day, you arrive with the funds needed to close. These funds are typically wired to the attorney from your bank or in the form of a certified cashier’s check. You’ll be asked to sign the closing papers and title documents on the spot – expect to spend at least a few hours signing paperwork. Once the signing is complete…
Congratulations! You’re officially a homeowner!
Following the steps above will help set you up for success when buying your home. For more information on our home loan options, visit atlanticunionbank.com/mortgage. Once you're there, discuss your personal homebuying journey with one of our mortgage professionals by clicking on "Ask About Purchasing" and filling out the brief questionnaire.
Sources: Joe Kelly, Atlantic Union Bank and Zillow