By Charlestien Harris
Purchasing a home is one of the most important decisions most people will ever make. The length of time it takes to buy a home varies according to the readiness of a potential buyer. For some it can take a few months, for others it can take longer depending on factors such as credit history, savings, or having enough money for a down payment and closing costs.
Step 1: Register to take a home buyer education class.
A homebuyer education course can be an online or in-person class you take to better understand what’s involved in finding, buying and owning a home. You might be required to complete this course by your mortgage lender if you’re participating in down payment assistance or other housing financing programs. The more you know about the process, the more you as the prospective homeowner will be prepared to go through the steps of purchasing and owning a home.
Individual housing counseling can also be helpful when preparing to buy a home. A HUD certified housing counselor can offer assistance with providing an analysis of your financial situation and offer recommendations on how to address specific obstacles to homeownership. HUD-approved counseling agencies can be found at https://www.hud.gov/program_offices/housing/sfh/hcc.
Step 2: Know how much you can afford.
Determining how much you can actually spend on a monthly house payment is critical to becoming a successful home owner. Knowing where you are financially is key. Creating a realistic budget or spending plan can let you know whether you’re prepared to take on additional monthly expenses related to purchasing a home. Once you know how much you can afford, it’s time to get pre-approved for a loan. Pre-approval is where you apply for the loan before you find a house you want to buy. Doing this can help you avoid the disappointment of looking at houses you can’t afford.
Step 3: Decide what kind of house you want, but keep in mind what you actually need.
You should consider affordability, family size, lifestyle, special needs for young children, older adults and those with disabilities. Location and the distance from your job is also very important.
Step 4: Look at multiple houses.
You should allow yourself a number of choices so you can compare and examine the pros and cons of each home when it comes to making a final decision.
Step 5: Narrow down your choices.
Begin to narrow your search by looking very closely at the property conditions, neighborhood characteristics and whether or not the price falls within your budgeted amount. When you have found the house of your dreams and the price is right, you’re ready for the sixth step.
Step 6: Make an offer.
An offer is usually accompanied by earnest money to show your intentions to complete the sale.
Step 7: Get a professional home inspection.
Soon after your offer is accepted, you should hire a home inspector to check the structural soundness of the property.
Step 8: Apply for the mortgage loan.
Shop around for the most affordable loan option that best fits your needs.
Step 9: Buy home insurance.
Purchase the proper home insurance that can protect against losses resulting from damage to your home or possible liabilities.
Step 10: Close on the loan.
The final step in the home purchase process is also known as the settlement. This is when the closing documents are signed, closing costs are paid and the house keys are given to the new owner.
It is very important that you take each of these steps seriously because it could mean the difference between becoming a homeowner and not. For additional information about the homeownership process and other financial resources, visit www.banksouthern.com/opportunity-center or contact me at 662-624-5776 or Charlestien.harris@southernpartners.org. Southern Bancorp Community Partners has five HUD-certified housing counselors on staff to assist you. Until next week, stay financially fit!