So you want to buy a house. Here are 4 steps to help you.
Step 1 – Planning – Start with planning and put some time in your schedule to do some serious planning. You do not want to impluse buy a home or not complete your plans before going to step 2. If you are married you need to do this with your spouse. If you cannot calmly discuss difficult issues with your spouse, then you need to backup and work on this issue before proceeding. Trust me, you have relationship problems if you cannot work together and you will only make things worse if one of you plows ahead. Now that we are past that … Consider location, schools, size, features. Write down a list of NEEDS and a list of WANTS. Calculate your max monthly payment ( I will not go above this amount, never, ever) and the max available for down payment and closing costs (I will not go above this amount, never, ever). Write down what you decided. You are ready for step 2.
Step 2 – Find some reliable experts. You need a mortgage loan officer, realtor, and insurance agent. If you already have an expert, use them. If you don’t, ask your friends or family for 1 or 2 referrals. Each of these experts can refer you to the other expert types. Look online. Get two or three of each. Once you have some names, phone number, and emails, you can go to step 3.
Step 3 – Learn the basics. Tell your two or three loan officers your basic details:
– your middle credit score is ____ (typical range is 500 – 830)
– approximate cost of house (you are guessing at this point, but approximate)
– max cash to closing
– max monthly payment (this includes property taxes and home insurance and principle and interest)
– VA benefits
– your income and list of monthly debts
– any special situation like upcoming bonus, debt collection, bankruptcy, pending divorce, etc
The loan officer should be able to tell you your max house price range
Request an estimate so you understand loan fees
Tell your two to three realtors your basic details: (don’t start looking at houses until you have determined the realtor you are the most comfortable with)
– location to look
– approximate max price of house (from loan officer)
– down payment amount
– loan amount you qualify for ( from loan officer)
request some possible homes available that fit your description
Step 4 – Decide your loan officer and realtor based on information provided, cost, availability, and comfort level.
Your are ready to buy a house. The process can have several bumps along the way. Homes that do poorly at inspection time or loan costs that are unexpected or homes that get sold to someone else.