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.

Tagged with:
 

Everyone wants to own a home of their own at some point in their lives. There is only one first home, and you don’t get a second chance. Well, you get a second or third if you want, but that first experience can have a significant effect on how you feel about homeownership. So, here a just a few common sense tips. Unfortunately, common sense isn’t always common.

First, slow down. There is no rush to buy that home. When you hurry, you put pressure on yourself to get it done, and you overlook things that can cost you time and money down the line. Sometimes family puts pressure on you to buy your first home so that you can start having babies and they don’t want their babies living in a little apartment. Again remember, you are the one who has to live there and the one that has to pay for it. So all those people putting pressure to buy really should not have that kind of influence unless they commit to the full responsibility of the homeownership.

Second, be realistic about the cost. You commonly hear that it is cheaper to own than to rent, and depending on the point of view that can be true. Most people are saying that based on just principle and interest. But have you ever driven through a nice neighborhood and some houses are really kept looking nice, and then there are those houses that the yard is a mess? The grass is not green, flowers and maybe even trees are dying — the actual physical house kind of looks a little run down. You think “this is your home, why are you not taking care of it?” Well, there is a thing that as renters you never have to deal with, and it is called upkeep. Also, utilities like water can get expensive.In a lot of cases, the homeowners bought as much as they could afford in payments without having anything extra. So now they do not have the money for the excess water to water the grass or buy new plants or clean the shutters or fix a window. Take time to understand what your budget is currently. Could you right now—outside of your rent—put an extra twenty to thirty percent of your income into a savings account and have it not affect your food budget? If you can START. RIGHT. NOW. Remember you do have to have a down payment too, so if you don’t have it in hand, you have to start saving for it.

Third, look at homes. Do not engage a realtor yet! They have one job, and it is to sell you a house. Right now you are not to that point, so do not put that pressure on yourself. Start driving around neighborhoods and start observing different things about them. Start getting into the habit of seeing the little details of each home. Go online Friday night and find the OPEN HOUSES that are going to take place on Saturday and Sunday. Determine which ones you would like to see. Look at ones that are way out of your price range, ones in your price range, and then do not miss the ones that are way below your price range. Remember it is better to be way below your budget than at the very top end. As you go through each of these homes, do not just wander through. Take your time to look at the details. Not only the cool aspects but the little things that show that might be wrong, a link in a sink, marks in the walls and doors. These opens houses not only help you figure out what you do or do not want, but they also help you not to miss things when you are ready to buy and find the house that you would like to purchase. There is nothing worse than buying a home and after you moved in you start seeing things that are an issue that you do not remember being there before you purchased.

It is all about the details and since you have never purchased a home before you need practice paying attention to the details so you will be the best buyer you can be when you have your downpayment ready.

One last note, when you visit these open houses, the realtor usually wants a contact number for follow-up. If you are not ready for that pressure, let them know you’re just in the preliminary stages of looking. A home could be the biggest purchase of your life, so go into it relaxed and prepared.

Tagged with:
 
Set your Twitter account name in your settings to use the TwitterBar Section.