1. Start improving your credit score<\/strong><\/h3>\n\n\nYou can check your credit score by going to the three national credit bureaus: Experian<\/a>, Equifax<\/a>, and TransUnion<\/a>. Each will give you a three-digit number that reflects how well you\u2019ve paid your bills in the past and how much debt you currently have compared to your income.<\/p>\n\n\nThe higher your credit score, the more competitive your interest rate will be. If you have a score below 660, work to raise it to at least a 720, but a score of 760 or above will get you the best rates. In order to make sure you get the best rate possible, try to start working to improve your credit score<\/a> a year before you want to buy.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Check your report for accuracy. If there are mistakes, correct them by informing the credit bureau in writing.<\/p>\n\n\n
\u2705 Ensure you\u2019re paying all your bills in a timely fashion. This includes utility bills and cell phone bills as well as debt repayments.<\/p>\n\n\n
\u2705 Stop applying for new credit and don\u2019t close any existing lines of credit, even if they are credit cards you no longer use.<\/p>\n\n\n
\u2705 Be prepared to explain any derogatory marks on your credit to a loan officer.<\/p>\n\n\n
2. Calculate how much house you can afford and get preapproved<\/strong><\/h3>\n\n\nThere are a few things to consider when determining how much house you can afford<\/a>. Beyond the total price of the property, you have to know how much you\u2019re required to put down to secure a mortgage. The more you can pay upfront, the better your rate.<\/p>\n\n\nA simple guideline to determine your home-buying budget is to cap the price at 2.5 times your gross annual salary. So, if you make $50,000 a year, your home should be no more than $125,000. If you want a more detailed breakdown, you can find several affordability calculators<\/a> online that will give you a breakdown of current mortgage rates, insurance and tax estimates in your area, closing costs, and how much you need to put down. When you\u2019re ready to get pre-approved for financing, a bank will look at your debt-to-income ratio<\/a>. Note that many agents and sellers won\u2019t work with you unless you are pre-approved.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Speak with a loan officer about getting pre-approved for a loan. The banker will help you determine what you can afford. Note that pre-approvals are only good for 60 to 90 days, so you should wait until you\u2019re ready to start looking before you get pre-approved.<\/p>\n\n\n
\u2705 Try living your new budget. Figure in the cost of your new mortgage, taxes, insurance, and utilities. Save the difference between that and what you are paying now. Can you handle it?<\/p>\n\n\n
3. Save money for the down payment and closing costs<\/strong><\/h3>\n\n\nSaving for down payment<\/a> is one of the most important steps in the homebuyer checklist. You are required to pay at least 20 percent of the property value to secure a conventional loan. Closing costs<\/a>, which cover attorney\u2019s fees, title fees, inspections, and other miscellaneous costs associated with processing the loan, can run an additional 3 to 5 percent. If you have less than 20 percent to put down, you are considered a high-risk borrower and may have to pay for private mortgage insurance (PMI)<\/a> which will add 0.5 percent to your payment annually.<\/p>\n\n\nAdditionally, you will want to build a healthy savings<\/a> beyond the amount that you will need for the down payment and closing costs. The more money you have set aside, the better your lender will feel about lending you money.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Be frugal and budget-conscious. There are many great ways to save money<\/a> each month that can add up to thousands of dollars a year.<\/p>\n\n\n\u2705 Know alternative ways to secure funding, including:<\/p>\n\n\n
\n- If you are a first-time homebuyer, you can withdraw up to $10,000 without penalty from an IRA.<\/li>\n
- You can receive up to $14,000 a year from each parent as a gift without taxation.<\/li>\n
- You can take a loan from your 401(k).<\/li>\n<\/ul>\n\n\n
4. Find the right agent to help you find the perfect home<\/strong><\/h3>\n\n\n![\"checklist](\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/sites\/3\/2015\/08\/blog-11steps-findhome.jpg\")
<\/figure>\n\n\nThere are two types of real estate agents: a seller\u2019s agent and a buyer\u2019s agent. The former represents the party selling the home, while the latter represents the buyer. All Realtors are bound by a code of ethics that requires them to always work in the best interest of the person they\u2019re representing.<\/p>\n\n\n
When you find a house you\u2019d like to tour on Movoto<\/a>, it\u2019s easy to request a call from a buyer\u2019s agent who will educate you about the market, help you search, show you homes, negotiate<\/a> with the seller, and represent you through all stages of the home-buying process. The buyer\u2019s agent is paid a commission<\/a> by the seller when you close.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Browse homes on Movoto<\/a> and request to be connected with a buyer’s agent.<\/a><\/p>\n\n\n\u2705 Speak with the buyer\u2019s agent so they can get a better idea of what you\u2019re looking for.<\/p>\n\n\n
\u2705 Decide if their experience and personality are a good fit<\/a> for your needs. Remember, you choose whether you want to work with an agent, so make sure you\u2019re happy with your pick.<\/p>\n\n\n5. Begin the home search<\/strong><\/h3>\n\n\nNow for the fun part: shopping for your dream home<\/a>. You\u2019ll want to start by deciding where you want to live. You probably already have an idea of what city you want to live in, but consider the pros and cons of each neighborhood. Look for signs that the neighborhood is growing, like the school district ratings, businesses coming into the area, and how long properties are on the market. These will help with your resale value in the future. If homes in your ideal neighborhood are selling quickly, then you can feel comfortable that the area is desirable.<\/p>\n\n\nOften, you\u2019ll have to decide between getting more house in a suburban area or sacrificing space and amenities for a more prime location. Make a list of your must-haves and deal-breakers, and be ready to be flexible.<\/p>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Consider looking for a home in the off-season<\/a>. You are likely to find homeowners willing to negotiate.<\/p>\n\n\n\u2705 Don\u2019t be too restrictive when searching for a home. Be willing to look beyond your ideal neighborhood and for homes without all the features you think you need.<\/p>\n\n\n
\u2705 Develop a scorecard with photos so that you can keep track of each house you see. After a while, all the houses will blur together unless you have a good system for keeping track.<\/p>\n\n\n
6. Make an offer on your dream home<\/strong><\/h3>\n\n\n![\"checklist](\"https:\/\/www.movoto.com\/foundation\/wp-content\/uploads\/sites\/3\/2015\/08\/blog-11steps-findhome4.jpg\")
<\/figure>\n\n\nOnce you have found a home that you love, you\u2019ll need to make an offer<\/a> on that house. Your buyer\u2019s agent will advise you on how much you should offer\u2014this can be lower or higher than the asking price depending on the market. Be sure that you\u2019re serious about moving forward before you put in an offer. Once the seller accepts the offer, you are past the point of considering the home and you move immediately into the contract stage.<\/p>\n\n\nMake sure that your offer touches on everything you want including concessions, financing contingencies, home inspection contingencies, and exactly what is included in the sale such as appliances, furniture, and even curtain rods.<\/p>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Know the data in the area. Your agent will be able to help you with this. You should have stats on at least three houses that have sold in the area. This will give you an idea of what to bid.<\/p>\n\n\n
\u2705 Negotiate with the owner. Rarely is a first bid accepted. Think about ways to be creative so that both you and the seller come out feeling like winners.<\/p>\n\n\n
7. Sign the homebuyer purchase contract<\/strong><\/h3>\n\n\nOnce the offer has been accepted, you are ready to sign a contract. The contract will highlight any contingencies<\/a> the seller must fulfill to complete the sale, and you will have to pay a good-faith deposit known as earnest money. This shows the seller that you intend to go through with the deal.<\/p>\n\n\nThis deposit is usually 1 to 10 percent of the purchase price and is put into an escrow account and will be used as part of your down payment once the sale is finalized. Until your actual closing, you\u2019re not obligated to buy the home even after signing a purchase contract, but if you withdraw without a good reason, you\u2019ll have to surrender your earnest money deposit.<\/p>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Have a lawyer or your buyer\u2019s agent review the document. It should state contingencies such as your ability to obtain a loan, passing home inspection, and a walk-through before closing to be certain that the condition of the home has not changed.<\/p>\n\n\n
\u2705 Make sure you have enough cash to pay your earnest money deposit.<\/p>\n\n\n
8. Go to your lender and finalize your loan<\/strong><\/h3>\n\n\nAlthough you may already be pre-approved for a loan, it is now time to actually secure the loan. Check several lending institutions<\/a> to find the loan that is right for you. Consider the interest rate, the points, the length of the loan, and the type of loan<\/a>. Once you find the loan you want, you will have to pay to have the home appraised. Sometimes this fee can be rolled into your closing costs. You will also need to take out a homeowner\u2019s insurance policy.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Determine what kind of loan you want. There are many styles of loans and many companies that provide loans. Look around and find the one that works best for you.<\/p>\n\n\n
\u2705 Shop around for insurance policies. Some companies give discounts if you bundle your home and car coverage with them.<\/p>\n\n\n
9. Have the home inspected by a professional<\/strong><\/h3>\n\n\nBefore buying a home, you should have it inspected<\/a>. This usually costs between $300 and $500 for the average home and takes approximately two hours. If the inspector finds problems, you will need to go back to the seller to determine how to handle the findings.<\/p>\n\n\nYou can either have the seller fix the problem before you move in, or you can fix it yourself but adjust the price of the house to reflect the repair price. If the seller does not want to fix the problem, and you are not comfortable going forward, you have the option to walk away from the deal.<\/p>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Hire a certified inspector. Do not rely on an inspection report provided by the seller.<\/p>\n\n\n
\u2705 Go with the inspector as they inspect the home to learn about its condition.<\/p>\n\n\n
10. Do your final walkthrough<\/strong><\/h3>\n\n\nBefore the closing date, you will make a final inspection<\/a> of the house. At this time, you will verify that everything is exactly as the contract stated. If certain items were supposed to be left in the home, now is the time to ensure they are still there. This is also the time to check that the home is clean and ready for you to move in.<\/p>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Take your time and check every area of the house including the garage and basement.<\/p>\n\n\n
\u2705 Deal with issues now, before closing. If items are missing or the home is not clean, this is the time to make it known.<\/p>\n\n\n
\u2705 Be detached. This is not the time to be excited about your new home. This is your last chance to find and resolve any problems before signing the final papers.<\/p>\n\n\n
11. Close the deal<\/strong><\/h3>\n\n\n\nCongratulations, you\u2019re about to officially become a homeowner. Closing is the final step in the homebuyer checklist. Before your actual closing day, you will receive an HUD Settlement Statement<\/a> that explains everything you will be paying at closing.<\/p>\n\n\nAt the actual closing, sometimes known as settlement or escrow, you will sign the papers putting the home in your name, verify the homeowner\u2019s insurance, agree to the mortgage terms, and receive your key. Closing procedures are different from state to state. Follow the instructions of your agent and loan provider.<\/p>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n\u2705 Review the HUD Settlement Statement carefully. If you find fees that you don\u2019t understand, ask your lender to clarify them for you.<\/p>\n\n\n
\u2705 Bring the proper paperwork to the closing settlement. This varies, so be sure to ask your lender and agent what you will need to bring.<\/p>\n\n\n
\u2705 Bring the funds for your down payment. Your lender will let you know what forms of payment are accepted.<\/p>\n
The higher your credit score, the more competitive your interest rate will be. If you have a score below 660, work to raise it to at least a 720, but a score of 760 or above will get you the best rates. In order to make sure you get the best rate possible, try to start working to improve your credit score<\/a> a year before you want to buy.<\/p>\n\n\n \u2705 Check your report for accuracy. If there are mistakes, correct them by informing the credit bureau in writing.<\/p>\n\n\n \u2705 Ensure you\u2019re paying all your bills in a timely fashion. This includes utility bills and cell phone bills as well as debt repayments.<\/p>\n\n\n \u2705 Stop applying for new credit and don\u2019t close any existing lines of credit, even if they are credit cards you no longer use.<\/p>\n\n\n \u2705 Be prepared to explain any derogatory marks on your credit to a loan officer.<\/p>\n\n\n There are a few things to consider when determining how much house you can afford<\/a>. Beyond the total price of the property, you have to know how much you\u2019re required to put down to secure a mortgage. The more you can pay upfront, the better your rate.<\/p>\n\n\n A simple guideline to determine your home-buying budget is to cap the price at 2.5 times your gross annual salary. So, if you make $50,000 a year, your home should be no more than $125,000. If you want a more detailed breakdown, you can find several affordability calculators<\/a> online that will give you a breakdown of current mortgage rates, insurance and tax estimates in your area, closing costs, and how much you need to put down. When you\u2019re ready to get pre-approved for financing, a bank will look at your debt-to-income ratio<\/a>. Note that many agents and sellers won\u2019t work with you unless you are pre-approved.<\/p>\n\n\n \u2705 Speak with a loan officer about getting pre-approved for a loan. The banker will help you determine what you can afford. Note that pre-approvals are only good for 60 to 90 days, so you should wait until you\u2019re ready to start looking before you get pre-approved.<\/p>\n\n\n \u2705 Try living your new budget. Figure in the cost of your new mortgage, taxes, insurance, and utilities. Save the difference between that and what you are paying now. Can you handle it?<\/p>\n\n\n Saving for down payment<\/a> is one of the most important steps in the homebuyer checklist. You are required to pay at least 20 percent of the property value to secure a conventional loan. Closing costs<\/a>, which cover attorney\u2019s fees, title fees, inspections, and other miscellaneous costs associated with processing the loan, can run an additional 3 to 5 percent. If you have less than 20 percent to put down, you are considered a high-risk borrower and may have to pay for private mortgage insurance (PMI)<\/a> which will add 0.5 percent to your payment annually.<\/p>\n\n\n Additionally, you will want to build a healthy savings<\/a> beyond the amount that you will need for the down payment and closing costs. The more money you have set aside, the better your lender will feel about lending you money.<\/p>\n\n\n \u2705 Be frugal and budget-conscious. There are many great ways to save money<\/a> each month that can add up to thousands of dollars a year.<\/p>\n\n\n \u2705 Know alternative ways to secure funding, including:<\/p>\n\n\n There are two types of real estate agents: a seller\u2019s agent and a buyer\u2019s agent. The former represents the party selling the home, while the latter represents the buyer. All Realtors are bound by a code of ethics that requires them to always work in the best interest of the person they\u2019re representing.<\/p>\n\n\n When you find a house you\u2019d like to tour on Movoto<\/a>, it\u2019s easy to request a call from a buyer\u2019s agent who will educate you about the market, help you search, show you homes, negotiate<\/a> with the seller, and represent you through all stages of the home-buying process. The buyer\u2019s agent is paid a commission<\/a> by the seller when you close.<\/p>\n\n\n \u2705 Browse homes on Movoto<\/a> and request to be connected with a buyer’s agent.<\/a><\/p>\n\n\n \u2705 Speak with the buyer\u2019s agent so they can get a better idea of what you\u2019re looking for.<\/p>\n\n\n \u2705 Decide if their experience and personality are a good fit<\/a> for your needs. Remember, you choose whether you want to work with an agent, so make sure you\u2019re happy with your pick.<\/p>\n\n\n Now for the fun part: shopping for your dream home<\/a>. You\u2019ll want to start by deciding where you want to live. You probably already have an idea of what city you want to live in, but consider the pros and cons of each neighborhood. Look for signs that the neighborhood is growing, like the school district ratings, businesses coming into the area, and how long properties are on the market. These will help with your resale value in the future. If homes in your ideal neighborhood are selling quickly, then you can feel comfortable that the area is desirable.<\/p>\n\n\n Often, you\u2019ll have to decide between getting more house in a suburban area or sacrificing space and amenities for a more prime location. Make a list of your must-haves and deal-breakers, and be ready to be flexible.<\/p>\n\n\n \u2705 Consider looking for a home in the off-season<\/a>. You are likely to find homeowners willing to negotiate.<\/p>\n\n\n \u2705 Don\u2019t be too restrictive when searching for a home. Be willing to look beyond your ideal neighborhood and for homes without all the features you think you need.<\/p>\n\n\n \u2705 Develop a scorecard with photos so that you can keep track of each house you see. After a while, all the houses will blur together unless you have a good system for keeping track.<\/p>\n\n\n Once you have found a home that you love, you\u2019ll need to make an offer<\/a> on that house. Your buyer\u2019s agent will advise you on how much you should offer\u2014this can be lower or higher than the asking price depending on the market. Be sure that you\u2019re serious about moving forward before you put in an offer. Once the seller accepts the offer, you are past the point of considering the home and you move immediately into the contract stage.<\/p>\n\n\n Make sure that your offer touches on everything you want including concessions, financing contingencies, home inspection contingencies, and exactly what is included in the sale such as appliances, furniture, and even curtain rods.<\/p>\n\n\n \u2705 Know the data in the area. Your agent will be able to help you with this. You should have stats on at least three houses that have sold in the area. This will give you an idea of what to bid.<\/p>\n\n\n \u2705 Negotiate with the owner. Rarely is a first bid accepted. Think about ways to be creative so that both you and the seller come out feeling like winners.<\/p>\n\n\n Once the offer has been accepted, you are ready to sign a contract. The contract will highlight any contingencies<\/a> the seller must fulfill to complete the sale, and you will have to pay a good-faith deposit known as earnest money. This shows the seller that you intend to go through with the deal.<\/p>\n\n\n This deposit is usually 1 to 10 percent of the purchase price and is put into an escrow account and will be used as part of your down payment once the sale is finalized. Until your actual closing, you\u2019re not obligated to buy the home even after signing a purchase contract, but if you withdraw without a good reason, you\u2019ll have to surrender your earnest money deposit.<\/p>\n\n\n \u2705 Have a lawyer or your buyer\u2019s agent review the document. It should state contingencies such as your ability to obtain a loan, passing home inspection, and a walk-through before closing to be certain that the condition of the home has not changed.<\/p>\n\n\n \u2705 Make sure you have enough cash to pay your earnest money deposit.<\/p>\n\n\n Although you may already be pre-approved for a loan, it is now time to actually secure the loan. Check several lending institutions<\/a> to find the loan that is right for you. Consider the interest rate, the points, the length of the loan, and the type of loan<\/a>. Once you find the loan you want, you will have to pay to have the home appraised. Sometimes this fee can be rolled into your closing costs. You will also need to take out a homeowner\u2019s insurance policy.<\/p>\n\n\n \u2705 Determine what kind of loan you want. There are many styles of loans and many companies that provide loans. Look around and find the one that works best for you.<\/p>\n\n\n \u2705 Shop around for insurance policies. Some companies give discounts if you bundle your home and car coverage with them.<\/p>\n\n\n Before buying a home, you should have it inspected<\/a>. This usually costs between $300 and $500 for the average home and takes approximately two hours. If the inspector finds problems, you will need to go back to the seller to determine how to handle the findings.<\/p>\n\n\n You can either have the seller fix the problem before you move in, or you can fix it yourself but adjust the price of the house to reflect the repair price. If the seller does not want to fix the problem, and you are not comfortable going forward, you have the option to walk away from the deal.<\/p>\n\n\n \u2705 Hire a certified inspector. Do not rely on an inspection report provided by the seller.<\/p>\n\n\n \u2705 Go with the inspector as they inspect the home to learn about its condition.<\/p>\n\n\n Before the closing date, you will make a final inspection<\/a> of the house. At this time, you will verify that everything is exactly as the contract stated. If certain items were supposed to be left in the home, now is the time to ensure they are still there. This is also the time to check that the home is clean and ready for you to move in.<\/p>\n\n\n \u2705 Take your time and check every area of the house including the garage and basement.<\/p>\n\n\n \u2705 Deal with issues now, before closing. If items are missing or the home is not clean, this is the time to make it known.<\/p>\n\n\n \u2705 Be detached. This is not the time to be excited about your new home. This is your last chance to find and resolve any problems before signing the final papers.<\/p>\n\n\n Congratulations, you\u2019re about to officially become a homeowner. Closing is the final step in the homebuyer checklist. Before your actual closing day, you will receive an HUD Settlement Statement<\/a> that explains everything you will be paying at closing.<\/p>\n\n\n At the actual closing, sometimes known as settlement or escrow, you will sign the papers putting the home in your name, verify the homeowner\u2019s insurance, agree to the mortgage terms, and receive your key. Closing procedures are different from state to state. Follow the instructions of your agent and loan provider.<\/p>\n\n\n \u2705 Review the HUD Settlement Statement carefully. If you find fees that you don\u2019t understand, ask your lender to clarify them for you.<\/p>\n\n\n \u2705 Bring the proper paperwork to the closing settlement. This varies, so be sure to ask your lender and agent what you will need to bring.<\/p>\n\n\n \u2705 Bring the funds for your down payment. Your lender will let you know what forms of payment are accepted.<\/p>\nTo Do:<\/u><\/strong><\/h4>\n\n\n
2. Calculate how much house you can afford and get preapproved<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
3. Save money for the down payment and closing costs<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
\n
4. Find the right agent to help you find the perfect home<\/strong><\/h3>\n\n\n
<\/figure>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n
5. Begin the home search<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
6. Make an offer on your dream home<\/strong><\/h3>\n\n\n
<\/figure>\n\n\nTo Do:<\/u><\/strong><\/h4>\n\n\n
7. Sign the homebuyer purchase contract<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
8. Go to your lender and finalize your loan<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
9. Have the home inspected by a professional<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
10. Do your final walkthrough<\/strong><\/h3>\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n
11. Close the deal<\/strong><\/h3>\n\n\n\n
To Do:<\/u><\/strong><\/h4>\n\n\n