How Do You Actually Buy a House?

Summary

This video guide offers a step-by-step roadmap to homeownership, outlining the crucial stages from securing a mortgage to closing the deal. It starts with choosing a loan officer and getting pre-approved, then moves on to finding a realtor and making an offer on a house. It emphasizes the importance of maintaining financial stability throughout the process and highlights key steps like the option period, inspections, and underwriting. Finally, it covers closing day procedures, final payments, and the hidden costs of moving in, providing a thorough but approachable overview of what to expect when buying a home.

Takeaways

• 😀 Make sure you can secure a loan before you start house hunting—most people can’t buy without one.
• 😀 A loan officer helps you find the right mortgage and guides you through the paperwork.
• 😀 The more you can put down upfront and the better your credit score, the better the terms of your loan.
• 😀 You don’t need everything in order to reach out to a loan officer—seek guidance early, even if you're not ready to buy.
• 😀 A realtor is your personal shopper and negotiator, helping you find the right home and make a competitive offer.
• 😀 Be careful not to change your financial situation during the loan approval process (no new jobs or credit cards).
• 😀 The option period allows you to inspect the home and ask the seller to fix major issues or adjust the price.
• 😀 After inspection, the loan officer works with the underwriter to finalize your loan approval.
• 😀 On closing day, you’ll pay down payment and closing costs, then sign a stack of paperwork to complete the purchase.
• 😀 After closing, expect your first mortgage payment to be due the second month after the closing date.
• 😀 Don't forget moving costs—setting up utilities, buying new items, and taking care of damages or hiring help.

Q & A

What is the first practical step in the home buying process?

The first practical step is ensuring you can get a loan. This involves choosing a loan officer who will help you secure a mortgage.

What is the role of a loan officer in the home buying process?

A loan officer helps you secure a mortgage by matching you with the right loan based on your financial situation. They also help you determine how much house you can afford and guide you through closing costs.

What are the key factors that affect the terms of your mortgage?

The key factors are your credit score and the amount you can put down for a down payment. A higher credit score and a larger down payment generally lead to better mortgage terms.

What is a pre-approval letter, and why is it important?

A pre-approval letter is a document from your loan officer confirming that you qualify for a loan up to a certain amount. It is important because it shows sellers that you are financially capable of buying their home, strengthening your offer.

What should you avoid doing once you have a pre-approval and submit an offer?

Once you're pre-approved and have submitted an offer, avoid changing your financial situation, such as changing jobs or taking on new debt. This could jeopardize your loan approval.

What is the option period in the home buying process?

The option period is a window, usually 5-10 days, after the seller accepts your offer. During this time, you can inspect the house and decide whether to move forward with the purchase or negotiate based on any issues found.

Why is hiring a professional inspector important during the option period?

Hiring a professional inspector is crucial to ensure the house is safe and up to code. It helps identify any major issues, such as problems with the roof or HVAC system, which could affect your decision to proceed with the purchase.

What role does the underwriter play in the mortgage process?

The underwriter reviews your loan application and all the supporting documents to determine if you are a reliable borrower. They decide whether to approve or deny your loan.

What is the final step before closing on a home purchase?

The final step before closing is getting the 'clear to close' from the underwriter. Once this happens, you can prepare to pay your down payment and closing costs to finalize the purchase.

What should you expect after closing on your new home?

After closing, you'll typically make your first mortgage payment two months later. Additionally, you should prepare for moving costs, which can include utility setup, restocking supplies, and other incidental expenses.