How long does it take to buy a home? There are a lot of variables to consider, including how quickly you want to buy a home, so the timeline is different for every buyer. We've outlined the main steps involved in the process to help get you started — and we'll cover each topic more in–depth throughout this spring homebuying season.
Step 1: Understand What You Can Afford
Get very familiar with your finances — your credit score, income, debts, savings, and monthly expenditures — to assess how much you may be able to afford. When looking at your savings, remember to account for the down payment and closing costs.
Step 2: Find Your Team
Your housing counselor, real estate agent, and lender will be critical in guiding you through the homebuying process. To learn about what each person does, read last week's post in our Spring Homebuying series, “Who Does What?”
Step 3: Financing Your Purchase
Get Pre–approved. A pre–approval letter from your lender will tell you how much home you can afford and the maximum amount you are qualified to borrow. Having a pre–approval letter in hand while shopping for homes can help you move faster and with greater confidence in competitive markets.
Learn About Your Down Payment Options. You have choices when it comes to making the down payment on your home purchase. Options range from 3 to 20% down and you'll want to talk with your lender about what makes best sense for you. Also, be sure to check out your eligibility for down payment assistance programs that can help you reach your goal of homeownership.
Choosing Your Loan. There are two main types of mortgages — fixed–rate and adjustable–rate — that have their own set of features and benefits that need to be carefully considered. Selecting the right mortgage may make a big difference in your monthly payments and the overall cost of your loan.
Step 4: Finding Your Home
Buying a home is a big deal, so finding the right one that fits your needs is especially important and can have long–term impacts on both your wallet and your quality of life. This infographic outlines some of the factors you should consider like home type, location, city taxes, etc.
Step 5: Make an Offer
Your real estate agent will help you determine an offer price that is fair, based on experience and looking at comparable homes in the neighborhood. Your agent will submit an offer letter to the seller's agent that will include a deadline for them to respond, typically one to two days.
Step 6: Closing
After you've negotiated the offer and completed a successful home appraisal and inspection with the help of your agent, it's time to close. Closing is the final step to homeownership that involves all parties signing final documents and legally transferring the property, and keys, to you.