The process of buying a new home is exciting. Picturing your family in each room, in the yard, and the new memories that you’ll make are all a part of the process. However, before you get to that point, there are a few things you need to do to make those dreams a reality. Let’s take a closer look at the home buying process from start to finish.

Check Your Credit Score and Determine Your Budget

Before you begin the home buying process, you should ensure that you’re actually in a position to take on the responsibility of a mortgage. This begins with knowing and understanding your credit score, monthly budget, and financial situation. Mortgage lenders use your credit score and financial history to determine if you qualify for a loan. The higher your credit score, the better your chances of obtaining a mortgage are; furthermore, lower interest rates are available to those with higher credit scores. While different loan programs have different requirements for minimum credit scores, it is always best to check with a lender.

Once you know your credit score, you should sit down and create a budget. You should consider your current monthly debt and basic living expenses (gas, food, medicine, and utilities to name a few). After reviewing your current financial situation, you can then determine how much of a house note you would be comfortable paying each month.

Find a Home Mortgage Lender and Get Preapproved

The next, and arguably most important step, is finding a home mortgage lending company and loan officer. Your lender will help you get prequalified or preapproved, allowing you to confidently shop for your new home. Reputation, experience, expertise, and service are critical characteristics when looking for a lender. Different circumstances may occur during your home buying journey, and having a partner that you can trust to move your transaction along smoothly is invaluable.

Hire a REALTOR®, Find a Home, Make an Offer

Hiring a real estate agent can help you find your ideal home. They will also work on your behalf as a fiduciary between any seller and their agent. Having a representative in your corner will help you to have the best information to make the best decision when it comes to finding a property and making an offer. Once you make an offer, you’ll need to put down an earnest money deposit that will be placed in an escrow account. Earnest money deposits prove to the sellers that you have a vested interest in completing the real estate purchase and help both parties negotiate in good faith. This money will be applied toward your closing costs at the closing of your new property.

Have the Property Inspected and Appraised

The final stages before you sign on the dotted line typically include an inspection of the home and an appraisal. The inspection is for the buyer’s benefit to discover any underlying issues with the home that may need to be addressed. If the inspector uncovers anything that needs to be repaired, you may use that to negotiate before the transaction closes. The appraisal, which is different and separate from the inspection, is meant to determine the market value of your home. An appraisal is for the benefit of both you and your lender. Comparable sales, market trends, and the overall condition of the home are reviewed as a part of the appraisal. These features help determine if the sales price is reasonable and also help ensure that the lender is not financing more money than the home is worth. Typically, your lender will not allow you to borrow more than the appraised value of a property.

Complete the Mortgage Closing Process

Once the appraisal report is received by your lender, the final terms of your loan will be set, and you will receive your closing disclosure which outlines the terms of your loan, closing costs, and closing date. At your mortgage closing you’ll sign the legal documents that secure your property and pay the closing costs and down payment on your new home.

The home buying process can be as intimidating as it is exciting. Having the right loan officer in your corner can make all of the difference in the world. If you are in the market for a new home, or a refinance of your current home, the expert staff at Standard Mortgage (NMLS#:44912) has been helping home buyers and owners for over 90 years.