Buyer's Guide

Firstly, decide on your budget. Notice we said to decide on your budget—not determine how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget.

Also, just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage when you make an offer on a home, as some sellers won’t entertain offers from those who aren’t already pre-approved for a loan.

Finally, consider rate buy-downs and other creative financing. Of course, shop rates and compare terms.

Other than moving in, this can be the most enjoyable part of the experience. Based on information collected during the initial discovery session with your agent, you will be shown properties that fit within those criteria. Your agent will arrange showings and accompany you, pointing out items you may not notice and guide you through any pros and cons so that you have all the information to make educated decisions.

Take notes about what you like and don’t like, and make sure to pay attention to details. Turn light switches on and off, open and close doors, and run the faucets in various rooms. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities like schools and grocery stores.

In most cases, your contract will have an inspection contingency with the opportunity to inspect the property to identify any material defects and mitigate potential permitting or zoning issues. Information obtained can be used to determine insurability and extra costs in the short and long term. 

 Appraisals are a separate contingency, but can be seen as the lender’s inspection. They are typically ordered by the lender to determine if the home is of acceptable value and/or condition. A cash buyer may even choose to get a third party to give an opinion of value. 

Results of the inspections can range anywhere from simply moving to the next step of the process, renegotiation or cancellation of the contract.

Interchangeable or simultaneous with the previous step is the loan application (if applicable). Now is the time to go back to the mortgage lender who pre-approved you and formally apply for the loan. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with.

No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by your lender, title company and coordinated by your agent, if you have one. 

After good negotiations, with all paperwork complete and any unforeseen curveballs successfully navigated, you’re ready for closing day! A final walk-through is performed and once all documentation is signed (mortgage, note, disclosures etc) and monies are accounted for, you’re officially closed and are a new homeowner!