Homeownership is a significant milestone, and there are several steps homebuyers must take before they’re handed the keys to their dream home. Of course, the exact timeline of the home buying process can vary and depends on your unique financial situation and how long it takes you to find the perfect house. However, most homebuyers can expect to spend around five to six months from initial preparation to closing.
Are you thinking of buying a home but aren’t quite sure where to start? Knowing what to expect during the major stages of the home buying journey can help make the process more streamlined.
Before you take any other steps, make sure that you are personally and financially prepared to commit to purchasing a home. During the preparation stage, review your credit score and credit report. Avoid taking on any new debt to improve your debt-to-income ratio, and gather and organize all paperwork you’ll need to get preapproved for your home loan, i.e., W-2s, tax returns, and pay stubs.
You will need to be preapproved for a mortgage before you can begin shopping for your home. During the preapproval process—which usually takes about a week—your lender will verify your income and check your credit history and current debt levels to determine how much of a loan they are willing to offer.
A preapproval letter assures sellers and agents that you’re serious about purchasing and will ultimately strengthen your offer when you decide on the home you want. While the preapproval process usually doesn’t take too much time, you can help speed up the process by promptly answering all your lender’s questions, submitting all necessary documents, and responding to calls and emails on time.
Finding the perfect home is typically the longest part of the home buying journey. Depending on your local market, the shopping process can take up to three months. However, don’t be afraid to take as much time as you need to avoid committing to a home that isn’t the right fit for you and your family.
If you’re looking to speed up your shopping, be sure to do your homework beforehand. With a firm understanding of the ideal location, size, and features of your future home, you’ll save time when it comes time to start viewing properties.
Making an Offer
Once you find your perfect home, it’s time to make an offer! Typically, your real estate agent will draft up an offer letter defining the terms of the sale. This document will include details like the price, closing costs, and any repairs you’d like to be made before closing.
Once the sellers receive and review your offer, they may accept, reject, or submit a counteroffer. If your offer is rejected or countered, you may start negotiating or wish to move on to other properties.
After you’ve come to an agreement with your sellers, it’s time to prepare to close on your mortgage loan. Most lenders will need 30-45 days to finalize your loan details and ensure your future home meets your loan’s minimum requirements. During this time, your lender will schedule an appraisal and underwrite your loan.
Once your appraisal clears and your lender has completed underwriting your loan, it’s time to close. First, your lender will give you a Closing Disclosure—a document outlining the final terms of your loan. By law, your lender must provide at least three days for you to carefully read through your Closing Disclosure. After this three-day window passes, your lender will schedule a closing meeting. During the closing, you’ll sign your loan documents and pay your down payment along with the closing costs. Once you finish up your closing meeting, you’ll officially be a homeowner!
It’s important to remember that the home buying process varies for everyone. While some may be able to find and close on a home in less than six months, some may need much more time. If you’re ready to buy a house and are looking to explore your mortgage options, contact the experts at Coastal Custom Mortgage today!