If you’re about to buy a house, congratulations! You are about to become a new homeowner and embark on a home-owning journey. But there are a few things you should know about the process of buying a house. We’ve mapped out a timeline of the home buying process.
Getting pre-approved for a mortgage shows lenders that you’re serious about purchasing a home sooner than later. You’ll typically receive a loan estimate within three days that will outline your interest rate and other loan details. Here’s a list of things you may need to do to prepare.
- At least 6 months prior, make sure you have money saved up for a down payment. It’s also important to be aware of any discrepancies you may have with your finances by reading your credit report and score. Credit lenders will be actively checking your borrowing history, how much you owe, and how often you pay your bills on time.
- At least 3 to 5 months beforehand avoid taking out any new loans because doing so can affect your loan eligibility. Pay attention to your debt-to-income ratio to see whether you are affording your monthly payments.
- A few months beforehand, make sure to figure out any paperwork you’ll need for preapproval. Documents that are eligible include pay stubs, bank statements, and two years’ worth of federal tax returns.
Once the pre-approval process is over, you can start looking for a house since you know how much you can afford. Most homeowners look at up to 6 houses before making a purchase, but for those with specific criteria, it can be up to 20 houses.
Negotiate an offer
Once you’ve decided on the house you want to buy, your real estate agent will help put in an offer. If your offer gets approved, the next step is to schedule a home inspection. Typically, a home inspection must be completed within 10 days after you sign a purchase agreement.
Closing a loan
Once the home inspection is complete, your lender will move the loan into underwriting. This means the lender will access your collateral, credit and repayment history to see if you are an acceptable risk. This process can take anywhere from 30 to 45 days to complete. Once your mortgage is approved, your lender will supply you with a copy of your closing disclosure at least three days before your closing date. This will list all the fees and terms of the loan.
Buy a house!
The question you may be asking is, “how long DOES it take to buy a house?” As you can see, the process itself is lengthy and requires a lot of action beforehand. There is no set time that it takes for your loan to be approved so you can move forward with the buying process. However, the earlier you take action, the sooner your loan will be approved, and the sooner you will be making dinner in your beautiful new house.