If you want to learn how to buy a house, then you’ve come to the right place.
Buying a house, especially if you’re a first time home buyer, is full of excitement. However, it can cause you stress trying to figure out how to begin the process, how to go about getting a mortgage loan, how much house you can afford, etc.
Click here to get approved for a mortgage loan
Buying your first house is probably the biggest expense you’ll ever make in your life.
So knowing the right steps to take when buying a house not only makes the home-buying process easier, it can also save you thousands of dollars in mortgage interest and fees. Here are seven steps for buying a house:
How to Buy a House in 7 Steps:
Wondering how to buy a house? Then consider these steps.
Step 1: Polish your credit score.
Step 2: Obtain a mortgage approval.
Step 3: Save for a down payment
Step 4: Find a real estate agent.
Step 5: Go house hunting.
Step 6: Get a home inspection and appraisal.
Step 7: Submit an offer.
Keep reading to learn how to buy a house in these easy and essential steps.
Step 1 to How to Buy a House: Polish your Credit Score
One of the steps to buying a house is to make sure you have a good credit score. The reason you need to have a good credit score is that you can qualify for the best mortgage rates.
A bad credit score will not lend you a good mortgage rate, let alone a mortgage loan for your dream home. So it’s important to know where you stand before you start with the home buying process.
There are several ways to check your credit score for free. But I would recommend MyFreeScoreNow.
Once you get a free copy of your credit report, fix any errors — pronto! If your credit score is low (a score of 620 and below is considered low), take steps to improve your credit score.
Here are some of the ways to raise your credit score:
1. Pay your bills on time. Making on time payments is one of the best ways to improve your credit score.
2. Don’t try to get new credit or new loan. In other words, keep the number of inquiries to a minimum.
3. Keep your credit utilization rate below 30% of the credit limit.
Step 2 to How to Buy a House: Get Pre-approved for a Mortgage.
Once you raise your credit score to a good score like 750+, then the next step to buying a house is to get pre-approved for a mortgage.
Having a pre-approval letter from a mortgage lender is important for two reasons: first, it shows a seller that you’re serious about buying the house. Second, it gives you an advantage over other buyers who don’t have such a letter.
More: Get pre-approved for a mortgage
First time home buyers often make the mistake of getting a mortgage quote from only one mortgage lender. That is a mistake — you’re leaving money on the table. And that’s why it’s so important to learn how to buy a house before you start the home-buying process.
What you should do is to compare mortgage rates from at least four lenders. That way you get the best rates and fees, and in turn, you save thousands of dollars on interests over the life of the mortgage loan.
If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.
Step 3 to Buying a House: Saving for a Down Payment
No guide would be complete on how to buy a house without mentioning what I considered to be one of the most important steps to buying a house: saving for a down payment.
When you decide to buy a house, one of the things you’ll have to consider is cost. And the biggest cost is the down payment.
Do you have enough money saved to buy a house?
Most lenders would prefer a 20% down payment. But a first time home buyer down payment can be as low as 3.5%.
Regardless of how much you pay down, you still need to save.
For more information on saving for a down payment, see How to Save for a Down Payment on a House.
Click here to get approved for a mortgage loan
Step 4 to How to Buy a House: Find a Good Real Estate Agent
Real estate agents are important when you’re buying a house. They give you a competitive edge. Another mistake first time home buyers make when buying a house is that they only look online for properties, on the Multiple List Services (MLS) or the newspaper.
However, that’s not enough. The best deals are sometimes the ones that are not easily accessible. That’s why you need a real estate agent, because they have “insider” information. They have a more understanding of what a good neighborhood is.
Also, they can show you properties that you wouldn’t otherwise know. Not just get a real estate agent when purchasing your home, get one with a good track record. Find one who knows the market. This is important especially if you don’t live nearby.
Best of all, their service won’t cost you anything. They will get their commission from the seller.
Click here to compare mortgage rates through LendingTree. It’s completely FREE.
Step 5 to How to Buy a House: Go House Hunting
Once you find your real estate agent, the next step is to go shop for your home. When shopping for a home, it’s usually a good idea to see as many homes as possible in your desired neighborhood.
Bring a notepad with you to take notes on things like the plumbing, the electrical system, the windows to see if they work properly, the floor to see if they are even, etc.
Also, take notes on the homes in the neighborhood. Are they well kept? Are there things like schools, shopping centers, parks nearby.
Click here to compare mortgage rates through LendingTree. It’s completely FREE.
Step 6 to How to Buy a House: Make an Offer.
Once you find a home that interests you, then work with your real estate agent to make an offer on the house. Again, this is when hiring a real estate agent is crucial. Your real estate agent can guide on what type of offers to make.
Step 7 to How to Buy a House: Get a Home Inspection.
Buying a house without inspecting it can lead to disaster.
Besides doing your own due diligence to make sure nothing is wrong with the house, you’ll also need to do a home inspection. The inspector will check the house for signs of problems that need fixing.
Your real estate agent can help you find an inspector. Once the inspection is done, both you and the seller will get a report. The report will usually lists things that need to be fixed. It’s up to you if you want the seller to fix any problems before closing.
Once you’ve completed all of these steps, you can go back to the lender that pre-approved you for the loan. Get the loan and pay closing cost. That is it. You’re a homeowner!
In conclusion, learning how to buy a house should not be difficult if you know what steps to take.
Make sure you have a good credit score and have enough money saving for a down payment.
Figure out how much you can afford. And make sure you shop and compare mortgage rates. Also, find a good real estate agent to show you the best houses and to guide you on the type of offers you’ll make on the house.
As long as you follow these steps on how to buy a house, the buying process should be a lot easier.
Are you ready to buy a house?
Learn more about how to buy a house:
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