If you’re dreaming of buying a house but don’t have a big pile of cash, getting a mortgage is the way to go. Most people buying a house need one, but getting a mortgage isn't automatic. Here’s what you need to know to get from just dreaming about a home to owning one.
Step 1: Mortgage Shopping
Start with looking for a mortgage before you pick your house. Different lenders have different deals, so it’s like shopping for a good sale. You can choose between a loan with a fixed rate that won't change or an adjustable rate that can go up or down.
Checking your credit score early is smart. A good score means better loan terms. If your score could use some help, now's the time to fix it.
Step 2: Getting Pre-Approved
A chat with a lender can lead to a pre-approval for a loan. This is when they check if you make enough money and don’t have too much debt. It’s a big step because a pre-approval tells sellers you're serious and can afford their house.
Getting pre-qualified isn’t the same—it’s just a quick chat with no paperwork. You want pre-approval; it’s like a golden ticket to home buying.
For pre-approval, you’ll probably need:
- Recent pay stubs or proof of income
- The last two years of tax returns
- Two years of W-2s from your job
- Bank statements from the last few months
- Info on any other properties you own
- Where you’ve lived the last two years
- Proof of your down payment, like a bank statement
- A letter if someone is giving you money for the down payment (to show it’s not a loan)
- Filled-out mortgage application
- Permission for the lender to check your credit
Step 3: The Home Appraisal
Once you’ve got a house in mind and a deal on the table, the lender will check out the house. They want to make sure it’s worth the money they're lending you. If the appraiser's price matches or is close to your offer, you’re good to go.
But if the appraiser says it’s worth less than your offer, you’ll have to make up the difference, ask the seller to drop the price, or get a second opinion.
Step 4: Final Steps to Ownership
Before you can own the house, you need to make sure it's really yours to buy. A title search will make sure no one else claims the house is theirs. Once the title is clear, you go to the closing. That’s a meeting where you, the seller, and anyone else involved sign all the papers, you pay up, and get those keys!
And there you have it! By tackling each step, you’ll go from home shopper to happy homeowner.
Ready to make your homeownership dreams come true? Contact me today!
