The Papineau Team's Blog
Generally, the length of the homebuying journey depends on the individual. In some instances, a buyer will purchase the first house that he or she views in-person. Or, in other cases, it may take a buyer several weeks or months to find a house that matches his or her expectations.
There is no need to rush the homebuying journey. But if you know what to expect when you pursue your dream house, you may be able to seamlessly navigate the property buying cycle.
Now, let's take a look at three tips to help you streamline the homebuying journey.
1. Establish Homebuying Criteria
If you know where you want to live and what you want to find in your ideal residence, you can tailor your house search accordingly. And as a result, you may be better equipped than other property buyers to discover a great house at an affordable price.
As you put together homebuying criteria, it is important to consider your long-term plans as well. For instance, if you enjoy city life and want to spend as much time as possible in the city, a house in the city may be the right choice for you. On the other hand, if you want to raise your family in a small town, you may want to hone your search to houses in small towns.
2. Get Pre-Approved for a Mortgage
A home purchase likely will require you to obtain a mortgage. Fortunately, banks and credit unions are available nationwide, and these financial institutions can help you get pre-approved for a mortgage.
Meet with several banks and credit unions so you can learn about all of the mortgage options at your disposal. Then, you can select a mortgage and enter the real estate market with a budget in hand.
3. Hire a Real Estate Agent
If you're on the lookout for your dream home, you may want to hire a real estate agent. This housing market professional can keep you up to date about new residences that become available in your preferred cities and towns – and much more.
Typically, a real estate agent will do whatever it takes to help you find and buy your dream home. He or she initially will learn about your homebuying goals and develop a custom homebuying strategy for you. Next, a real estate agent will set up home showings and keep you informed about open house events. And if you discover your ideal residence, a real estate agent will help you craft an aggressive offer to purchase this house.
Let's not forget about a real estate agent's homebuying expertise, either. If you ever have concerns or questions during the homebuying journey, a real estate agent can respond to them. That way, you can gain the insights you need to make an informed home purchase.
Simplify the homebuying journey – use the aforementioned tips, and you should have no trouble finding and acquiring your dream house.
Buying a home is one of the most expensive undertakings that you’ll ever have in your lifetime. You probably have spent months upon months saving for a downpayment in order to make your home purchase. The problem is that after they believe their savings are complete, many buyers discover unexpected costs that go along with buying a home, making the entire process even more stressful. You should be prepared for many different kinds of costs that go beyond the sticker price of a home. Below, many of those surprising costs are laid out in detail.
Closing costs can be anywhere from 2-7% of the purchase price of a home. Closing costs cover quite a bit including:
- Inspection fees
- Title insurance
- Property taxes
- Mortgage insurance
- Underwriting fees
- Recording fees
- Loan origination fees
Depending upon the type of loan you get or your specific circumstances, your closing costs could be even more. Keep in mind that you won’t find out your specific closing cost amounts until the purchase of the home is well underway. You can talk to your realtor and lender ahead of time to be prepared for your own situation.
Closing costs are also negotiable, so don’t forget to ask questions. Certain administrative fees, for example, are often unnecessary and can be waived.
If you have a low appraisal on your home, you may need even more cash on hand. In order to meet loan and home value requirements, lenders won’t approve a loan for an amount that’s higher than the home is appraised for. In this case, if you still want the home, you’ll be left to come up with the difference in cash. Otherwise, you could be forced to walk away from the deal and lose some money in the process. This is one of those home purchase emergencies that you should simply be aware of. It can be an emotional experience to get a low appraisal on a home, but remember that there are sensible ways to deal with this dilemma.
Many buyers forget in the excitement of buying a home just how much it will cost to move. Whether you hire a moving company or do it yourself, moving can be expensive. You’ll need a truck, packing supplies and a way to pay (or simply thank) the people who help you to move.
The Things You Need For Your Home
Your home won’t come with everything that you need. You may have to buy a refrigerator, have some repairs done, or simply get furnishings for the home. Don’t strap your budget so thin that you won’t be able to buy a sofa until six months after moving into the home.
Dotting the I's and crossing the T's on a home loan application may seem like a daunting task, regardless of whether you're a first-time or experienced homebuyer. However, those who know what to expect when they fill out a home loan application may be better equipped than others to obtain a home loan that matches or exceeds their expectations.
When it comes time to fill out a home loan application, you'll need to provide a variety of information, including:
1. Personal Information
Allocate the necessary time and resources to provide as much personal information as possible on your home loan application. That way, you can make it easy for a lender to create a file for all of your home loan information.
Typically, your lender will ask for your Social Security number, date of birth, current housing information and school information. Provide accurate personal information at all times, and if you're uncertain about how to answer certain questions, consult with a home loan expert for additional support.
2. Employment Information
Where have you worked, and how much have you earned while you've worked for various companies in the past? As you complete your home loan application, you'll need to provide employment information to verify your current and past employment and income.
Usually, a lender will want you to provide the names, addresses and telephone numbers for any employers over the past two years. This will allow a lender to verify employment as part of the home loan application process.
You also will need to offer copies of your two most recent pay stubs to a lender. This will enable the lender to confirm your current income.
Lastly, if you are self-employed, you likely will need to provide a lender with a profit and loss statement for the past two years.
3. Financial Information
Tax forms, bank account information and asset details are some of the key parts of the financial information section of a home loan application.
Ultimately, the financial information section helps a lender verify if you have any outstanding credit lines, rental property and much more. This information will help a lender make an informed decision about your loan application and determine how much you are eligible to receive toward the purchase of a new house.
If you ever have questions at any stage of the home loan application process, don't hesitate to reach out to a home loan expert for help. This professional will be able to offer comprehensive insights to help you complete a timely, accurate home loan application.
In addition, your real estate agent may be able to put you in touch with various lenders in your area. With this housing market professional at your side, you can learn about different lenders and find one that can help you get the right home loan.
Finalizing a home loan application may seem like an uphill struggle. But if you act as a diligent homebuyer, you should have no trouble reviewing all sections of a home loan application. And as a result, you can provide a lender with relevant information and boost your chances of getting the perfect home loan.
Although being a first-time buyer can seem overwhelming, there was one advantage to the entire process: You didn’t need to sell another property. If you would like to move out of the home that you’re currently living in and are in the process of buying a new place, your life is about the get complicated! Hold tight to your realtor and get ready for quite the ride.
Since it’s often unrealistic to pay two mortgages at once, there’s a certain way that you must complete the transactions so as not to cause a huge financial headache when moving from one place to another. Unfortunately, you’re going to have to deal with buying a new home and selling your current one simultaneously in most cases.
The good news is that it can be done! Read on for tips to find out how you can make the process go as smoothly as possible.
First, you’ll want to understand the housing market that you’re in. You’ll know what strategies you need to employ if you understand the type of market that you’re dealing with. If the two homes are in completely different areas, this research will be even more important to you.
While you’re searching for a new home and selling your current one, you’ll want to leave your options open. That means not locking yourself down to just one home. Of course, you’ll only put in one offer at a time, but knowing what’s out there for you to buy is important in case the purchase falls through on the first prospective home. This way you won’t have much chance of being “stranded” once your old home sells.
You want your home to be sold in a timely manner. This means that your old home should be well-priced and ready to sell. Work with your realtor on staging, pricing, and holding open houses. The more effort that is put into marketing your home, the better chance you’ll have of selling it. Extra time on the market means that you’ll have a bigger headache when it comes to buying your new home. Selling quickly is not a bad thing so long as you have some other place to live. You can also put a contingency in the sale stating that you need to find suitable housing before you can move. Realtors can do a lot when their sellers are cooperative and proactive.
Should You Buy First?
If you sell your home first, you’ll have an easier time getting a mortgage on a new home. The problem here is that you’ll need to find some sort of temporary housing before you even head out on the house hunt.
If you buy a home fist, your buying power may be less than if you sold your current home. Your debt-to-income ratio will be higher, giving you less money to spend on a new home.
While buying and selling a home simultaneously can be complicated, if you strategize correctly, you’ll be able to go through the entire process with ease.
Do you ever wish that they taught a class in high school called, “Things You’ll Actually Need to Know In Life?” You’d learn how to prepare your taxes, what investing is, and how to buy a home.
Unfortunately, all of these important life lessons tend to be self-taught; you pick them up along the way and learn from your mistakes.
However, it needn’t be that way. Our goal today is to give you an accurate idea of what to expect when you’re buying your first home. We’ll go over a typically home buying timeline and discuss how long each step can take. This will give you a better idea of how long it will take to close on your first home.
Step 1: Build credit and save for a down payment
Estimated time: 2+ years
The first step of buying a home is to make sure you’re financially secure enough to do so. While there are ways to purchase a home with low or no down payments (See FHA, USDA, and VA loans), generally it’s wiser to wait until you have a sizable down payment saved. This will save you money in interest and mortgage insurance in the long run.
Next, you’ll need to start working on your credit. If your credit score took some hits due to late payments when you were younger, now is the time to start fixing those mistakes by making on-time payments and paying off outstanding balances.
Step 2: Have a plan for the next phase of your life
Estimated time 6+ months
One of the most important, and least talked about, parts of buying a home is understanding what it means to own a home. If you have a spouse, partner, or family, you’ll need to be in agreement that you’re prepared to stay in one place for the next 5 or more years.
Buying a home is expensive and you won’t want to go through the process of closing on a home if you aren’t sure you’ll stay. This means making sure your career won’t bring you elsewhere in the near future.
Step 3: Get prequalified and preapproved
Estimated time 1-3 days (depending on how much initiative you take)
Getting prequalified for a mortgage takes minutes. You simply fill out an online form and the lender will give you an idea of the type and size loan you could qualify for. Be forewarned: they’ll also use this information to call and bother you about getting a mortgage from them.
Once you’re prequalified, it’s just a matter of working with the lender to provide the correct documentation for pre-approval.
Getting preapproved takes a bit longer (1-3 days), since it requires a credit check and some work on your part--namely, gathering and sending income verification.
Once you’re preapproved, you can safely start shopping for homes without worrying that you’re wasting time looking at homes that are overbudget.
Step 4: House Hunting
Estimated time: 30+ days
It’s a seller’s market. So, if you’re buying a home right now there is competition out there. You’ll need to dedicate a substantial amount of time to researching homes online, contacting sellers’ agents, and following up on calls. Like before, the amount of effort you put into this process determines how quickly and smoothly you’ll get through it.
Step 5: Making an offer and closing
Estimated time: ~50 days
Average closing times for buying a home has grown to 50 days according to a recent study. However, by securing financing ahead of time and acting quickly, you can drastically cut down the time of these process to as little as two weeks.