The homebuying process can be complex and overwhelming, especially for first-time buyers. Understanding what to expect at each stage can help you navigate the journey with confidence.
Step 1: Pre-Qualification/Pre-Approval
The first step in the homebuying process is getting pre-qualified and/or pre-approved for a mortgage. The differences between these two processes are small, but notable. Let’s break it down:
Pre-Qualification
- Preliminary assessment of your ability to get a loan
- Utilizes basic financial information
- Only an estimate and does not guarantee final approval
- No hard credit inquiry required
- Great for the exploration phase of house-hunting!
Pre-Approval
- Thorough financial assessment
- Utilizes info from full credit check
- Determines a specific loan amount
- Financial documents are verified
- Great for when you’re ready to make an offer on a home!
Essentially, pre-qualification is a quick estimate, while pre-approval is a more formal and detailed assessment with a higher likelihood of a confirmed loan amount. Both of these processes help to give you a clear picture of your budget and can show sellers that you're a serious buyer.
Step 2: House Hunting
Once you're pre-approved, you can start house hunting. Work with a real estate agent to find homes that meet your criteria and budget. Attend open houses and schedule private showings to get a feel for different properties. And it’s okay to have a little fun with this part – touring homes and envisioning your life there is exciting!
Step 3: Making an Offer
When you find a home you love, it's time to make an offer. Your real estate agent will help you draft a competitive offer based on the home's market value and your budget. Be prepared for negotiations and counter offers from the seller.
Step 4: Home Inspection
After your offer is accepted, schedule a home inspection. A professional inspector will assess the property's condition and identify any potential issues. If significant problems are found, you may need to renegotiate the terms of the sale or request repairs. It’s also a great way to learn about any little nuances or specifics of the home you’re hoping to buy!
Step 5: Appraisal
Your lender will require an appraisal to determine the home's market value. The appraisal ensures that the property is worth the amount you're borrowing. If the appraisal comes in lower than the purchase price, you may need to renegotiate or cover the difference.
Step 6: Closing
The final step in the homebuying process is closing. During closing, you'll sign all necessary documents, pay closing costs, and officially transfer ownership of the property. Be prepared to review and sign (a lot of!) paperwork, and ensure you understand each document before signing.
Understanding what to expect during the homebuying process can help you navigate each stage with confidence. From pre-approval to closing, being prepared and informed will make your journey to homeownership smoother and more enjoyable.
When you’re ready to start the journey to homeownership, we’re here to help. Our First-Time Homebuyer Program* offers competitive rates, flexible terms, and attractive perks like up to 100% financing, no private mortgage insurance requirement, up to 3% seller assistance allowed, and no income cap to qualify. Get started today! Let us be the first to say, “Welcome home!”
*Additional options for first-time homebuyer products/terms available. PMI may be required. Contact one of our mortgage originators to find out which one is right for you.