Home Buying Tucson: 10 Steps to Success
You’ve crunched the numbers, thought about your lifestyle and made the decision to buy a home. It can be a complicated, stressful process. But knowing what to expect can reduce some of that anxiety and help you confidently find your way to your new home. Interest rates are at an all time low, the economy is booming, and new construction is a sure sign of immediate local economy.
To help, here’s a step-by-step guide to the home-buying process.
Step 1: Find a real estate agent
This person will be your lifeline through the process. Not so long ago, people didn’t have much to go on when selecting an agent. A postcard in the mail or a name on a sign might have been all you had to consider if you didn’t have a personal referral. Now with socail media and third party websites, its easy to find an agent online and see reviews. Go ahead and meet with a highly recommended agent and get all of your questions answered. Your agent is your chief advocate, confidante and hand-holder in the process so you want to find a good fit.
Step 2: Check your credit report and score
By law, you can get a free report once a year through Annualcreditreport.com. The report pulls data from the three major credit-reporting agencies: Equifax, TransUnion and Experian. Having the information in hand before you talk with a lender lets you dispute any errors in the reporting. Based on your credit report, Fair Isaac & Co. (FICO) assigns you a credit score ranging from 350 to 850. The higher your credit score, the lower the interest rate on your mortgage. Scores are based on:
• Payment history: Have you paid your bills on time? • Amounts owed: What is your overall debt? • Length of credit history: How long have you been borrowing money? Mortgage lenders like to see a long credit history. • New credit: Have you applied for new credit? • Types of credit: Lenders like to see a variety of types such as bank cards, car loans and student loans.
So what is a good credit score? You can expect a good mortgage rate at anything above 720. Home buyers who pursue an FHA loan can usually secure a loan if their credit is 580 or over.
Step 3: Get pre-approved by a lender
It’s a smart move to get pre-approved for a loan early in your home search.
Pre-approval requires the lender to pull the credit information (see Step 2) and assess your financial situation. The lender will then give you a letter that states the amount they would be willing to lend you.
You are not obligated to get a loan from the lender who you get a mortgage pre-approval from. When it’s time to officially apply for a mortgage, it’s best to get loan estimates from at least three lenders to compare their interest rates and fees.
Step 4: Figure out how much you can afford
Or better yet, decide how much you’re willing to pay. Just because you can qualify for a larger mortgage doesn’t mean you want to have that kind of payment each month. Now is also a good time to research your housing market, and start going to open houses in your prospective neighborhood to give you a good sense of what your money will get you.
Step 5: Start looking at homes
Let the serious shopping begin! By now you’ve talked things over with your agent and you both know what you really want in a home. Armed with this, your price range and knowledge of the local area, look at listings online and with your agent, who will come up with properties for you to tour. Chances are you’ll discover some new things to love or hate about homes and refine your search.
Step 6: Make an offer
For most buyers, this is when the butterflies really show up. Once you’ve found a home you want your agent will work with you to craft an offer. Remember, the listing price is only a starting point. Your agent will understand the market and help guide you to make the most attractive offer, whether it’s below, at or above listing price. Are there any contingencies to your offer? Will you require an inspection? These are all things your agent will help you with. Once you’ve submitted the offer you get to wait. It will seem interminable. You may get neither a simple yes or no but a counteroffer to consider. It can be something of a dance. If you get a solid “no,” it’s back to Step 5. If you get to a “yes,” its definitely something to celebrate, as you are one step closer!
Step 7: Home inspection day
A home inspection is not always required, but it is highly suggested!
If your offer called for a home inspection, this is a big day. Sure, you get to have a home inspector look over the home to make sure there are no unseen defects you want to negotiate to have fixed. But more importantly, this is the most time you’ll get to spend in your new home until closing. Go ahead and start measuring things and figuring out what goes where. This may be the last time you are inside the home until it is yours, several weeks from now.
Step 8: Get insurance and establish utilities
If you already own a home, simply call your insurance agent and let them know you’re buying a new home. They will handle writing a new policy. If you don’t have an insurance agent, now’s the time to find one because your lender will require homeowners insurance.. Even if you don’t have a mortgage, insurance is a critical part of protecting your investment. You’ll also want to give utility companies your move-in date to establish service. There’s nothing like moving into a cold, dark house because you didn’t get an account with the power company!
Step 9: Closing day
This is the big day. You’ll read and sign papers and then read and sign some more. Even though you’re just sitting around a table, it can be exhausting. But it also means you’re nearing the finish line.
Step 10: Get the keys and move in!
This is it. You did it. You are now a homeowner! Your sale contract will specify exactly how soon you get to move in. Sometimes it’s by a certain time on the day you sign closing papers. Sometimes possession happens a few days after closing. Whenever it is, you’ve just ended the adventure of home buying and started the adventure of homeownership.
Contact Billy Morris direct. Call or text. 520-256-6697