Hey everyone, Ryan Bolton here, local mortgage expert, RyanBolton.com. I am a mortgage nerd. You can check me out on Facebook and on YouTube by searching for MortgageN3rd.
Today I want to talk to you about the six steps to buying a home in 2023.
Step 1: Get pre-approved.
This will be step number one till the day mortgages don’t even exist. You want to do your pre-approval as your first step and do it early. I can’t tell you how many times people will come to me and their lease expires at the end of the month. They’ve got to get approved, find a house, do all that and move out by the end of the month. That is just crazy stressful. Give yourself a little more time by starting the pre-approval process. Pull your credit report, check your debt ratio, find out what mortgage programs are out there, how much down payment you’re going to need. All that stuff will be figured out in the pre-approval and it’s free. I don’t know anybody that charges for pre-approvals. This is an intricate part of the job is to lay down the foundation of what you’re going to need to buy a home. And I tell you, there’s so many ways we can improve your credit score if we have time to know why the score is the way it is and time to start maybe fixing things, paying down some debt, maybe building some positive credit. There’s so much that you can do if you just have a little bit more time, so start with the pre-approval to buy a home and get a mortgage. It’s going to be the number one step no matter what you do. It’s free. You have nothing to lose. Start, start, start with the pre-approval. All right.
Step 2: Narrowing down your search.
This is where you want to sit down with you and your spouse or just you, whoever’s going to be buying the home with you, really sit down and figure out what are your needs and wants. Do you have to have a certain number of bedrooms? Do you have to be in a certain part of town? Do you have to have a garage? Do you have to have a fenced yard? Really sit down and say, “Okay, here’s the four to five things we really need to have in the house.” It’ll really help narrow down your search and it’ll make sure you’re looking at homes that fit your needs. Then you also want to do some wants. These are things that can maybe be flexible. Maybe it is something where a certain acreage size or square footage or garage count or color or those things can maybe lean into more of the wants area, but by narrowing down your search, you’re going to be more effective on the homes you’re actually looking at and make sure that you’re not spending your time just shot gunning everything and just looking at everything. Really sit down after your pre-approval, once you know your loan amount, know what you’re qualified for, really start narrowing down some of the other things that you need and some of the things that you would like or want.
Step 3: Submitting offers.
This is where you’ll work with the real estate agent or work with the seller and start submitting offers on what you want to do with the house. There’ll be an asking price or list price. You’ll want to go through and submit the offer. This is where a real estate agent can help you, especially as a buyer, because the commission, their compensation, is paid through the price. It’s already built in that the seller is willing to pay that price regardless of the sales price. They’re just getting a percentage of that sales price. Use a buyer’s agent when you can, but this is where you’re going to start reviewing the contract. This is where you’re going to be able to start setting some dates. You’re going to be able to sit down with the contract or with the agent and figure out exactly what you want to submit, whether it’s a price, whether there are certain amenities you want included. Like maybe there’s a hot tub you want to have included or blinds or some feature in the home that isn’t necessarily part of the home you want to build in. Maybe there’s a carpet allowance you need. Maybe you need to ask the seller for concessions, meaning that you’ll keep the price the same but you want some of that money to be returned to help cover your closing costs. There’s things you want to work on as you’re submitting the offers on the home.
Step 4: Accepted Offer.
This is where some of the things start kicking into high gear. You’re going to have your seller disclosures. You’re going to have home inspections, appraisals, title work. You want to get your homeowner’s insurance. There’ll be these steps working with your lender that you want to keep moving the file forward. This is where you typically will update any income documentation. You’ll sit down with your lender and start really making sure your pay stubs and W-2s are up to date. We might do a pre-approval and it might be four or five months before an offer is even accepted. By that point, maybe the pay stubs are out of date. Maybe something’s changed with your income. Maybe something’s changed with the credit. If it’s been that long, it might be time to update the credit report. Once that offer is accepted, that’s when you really want to start gathering up updates on the paperwork. A lot of the paperwork is going to include your income documentation, so tax returns, pay stubs, W-2s. This will include your down payment source, so the bank statement that the money is in or if it’s gift funds from a family member or you’re selling a home and using the equity there, they’ll want to start sourcing that money down. And this is where you’ll want to get insurance quotes, so what the homeowner’s insurance might be, while you’re getting the home inspection done, while we’re getting appraisals done, all the inspections done at the same time. This is a moment where a lot of the files start overlapping. You just start filling in the gaps as you work forward.
Step 5: Finalize the underwriting.
You have all the income documentation, all the appraisals, all the inspections. The home is what you want. The price is all figured out as part of any renegotiation after the home inspection. This is where you’re going to finalize the underwriting and get what we all love to hear in the industry, and that’s, “You’re clear to close.” This means you’re done and you just have to go in, sign the paperwork, do the final verifications, and that’s when you actually close and own the home. Once you get that clear to close from the underwriter, that’s when you’re cleared to actually sign the paperwork to do the loan itself. Once you sign, the last step is recording and getting the keys, the garage door openers. The fun part is after it officially records. You have your clear to close that is basically saying, “Okay, all the underwriting is done. Everything’s checking out. Now you can sign your loan.”
Step 6: Funding and Recording!
But there’s one more step of funding the loan! They do one more verification. They’ll make sure you haven’t pulled credit, make sure you haven’t gotten a new car loan or something like that during the process. They’ll do one more verification that you’re still employed to make sure something hasn’t changed during the process, lost your job, something like that. That’s when they order the wires to go to the title company. They record, release the old owner, all that gets done at the title company and bam, you’re recorded, you’re done. You own the home. That’s the six steps. Pre-approval, narrow down your search, submit offers. Once accepted, work with your loan officer to get the conditions and then income and work on the file, get your inspections done, finalize the underwriting and then get your keys, fund and record. I hope you found this information helpful. Let me know if you have any questions, comments or concerns. You can comment that in the videos below. We can easily do individual videos on each one of these steps, but I thought I’d just jump on here and give you a general flow of what happens from the pre-approval to getting the keys on the home. You need to buy a home this year. This is the year you’re going to buy a house. Call me today if you have any questions. If you’re looking to buy a home in Utah and Nevada, that’s where I’m licensed. You can use my link here below to apply or ask any questions. But I’d love the opportunity to work with you on buying a home this year. Hope you have a wonderful day and see you around
