The home buying process can be a number of things for first, second, and third-time homebuyers: a) intimidating, b) frustrating, c) exciting, or d) all of the above. Regardless, the seasoned residential real estate professionals at Landmark Title Assurance Agency recognize that buying a home is a very challenging, yet rewarding transaction. With more than 40 years of experience providing closing services for real estate agents, lenders, mortgage brokers, and more, they can foresee common roadblocks most homebuyers overlook.
The residential title experts want you to experience a real estate transaction that is smooth and complication-free, which is why they’re taking the time to explain every step of the home buying process. That way, you can begin your home buying journey with the tools you need to succeed while avoiding problems that may impede the closing.
1) Check Your Credit Score And Calculate What You Can Afford
The first step in the home buying process requires checking your credit score and calculating what you can afford. By law, you are allowed one free copy of your credit report each year. Anything over that could hurt your credit score, essentially lowering it every time you check. Regardless, there are tools out there that can help you check your credit score without being penalized. Annualcreditreport.com and freecreditreport.com are two websites that can provide this information.
Credit scores range from 300 to 850. Generally speaking, most Phoenix mortgage lenders want to see a credit score between 720 and 740 before approving you for a loan. Nevertheless, 620 is normally the lowest credit score a lender will consider for a conventional home loan. Now, in regards to calculating what you can afford, there are a number of online tools that can help you determine an affordable monthly mortgage payment. When using these tools, make sure you are factoring in money for a down payment, closing cost fees, and any remodeling or furniture needed for your new place.
2) Find A Lender And Real Estate Agent
Next, you’ll want to find the right lender and real estate agent! Shop around and get recommendations from your friends and family. You may want to visit 3-4 Phoenix mortgage lenders before choosing the right one. The same goes for finding the right real estate agent – you’ll wan
Once you’ve solidified the two professionals you want to work with, you’ll want to get a pre-approval or an actual approval for a loan. If you’d like to go with the latter, your Phoenix mortgage lender will pull your credit score and submit your personal information to get you approved for a loan. Once you have been approved, you can start home shopping. With an actual approval, you can make an offer and hasten the sales transaction. This route is usually more desirable for sellers because it guarantees your purchase.
3) Look For A Home And Make An Offer
This is the fun part! Your real estate agent will look for homes based on your needs and wants, and then show them to you as they become available. You may spend days or weeks looking for a home, but don’t worry, that’s all part of the home buying process! Once you’ve found the house you’d like to call “home,” you will want to make an offer. Because most sellers list their homes at higher prices, you may want to work with your real estate agent to negotiate a lower price. Try starting 5% below the asking price – that’s usually standard for this industry. Regardless, the haggling may go back and forth for a while, but remain patient and keep an open mind. If your real estate agents tells you to stop haggling, trust them. Once both parties have agreed on a price, an earnest money deposit is needed before the closing can begin. This deposit demonstrates your commitment to purchasing the house.
4) Get The Right Mortgage And Close
There are different types of mortgage programs available, and it’s important you work with your lender to choose one that works best for you. The three basic mortgage programs include an adjustable rate mortgage, a fixed rate mortgage, and an interest-only mortgage. Your Phoenix mortgage lender can go over these options in detail, but when you select the one you want, be sure to schedule your home inspection and closing date around the same time. You’ll also want to discuss your closing costs with your Phoenix mortgage lender, but most costs include your down payment, title fees, appraisal fees, attorney fees, and inspection fees.
Finally, it’s time to move in! This is the last and most rewarding part of the process. Take the opportunity to enjoy your new home, and be sure to pat yourself on the back for a job well done!
If you have any questions about the home buying process, or you’d like to use Landmark Title’s residential title and escrow services, contact Jonie Alden (firstname.lastname@example.org) and Roxana Paredes (email@example.com). We look forward to hearing from you, and best of luck on your home buying endeavor!