The homeownership rate in the US rose to 65.5% in 2020, an increase of 1.3% from 2019. According to experts, that’s the highest reported annual increase.
Low mortgage rates, in turn, were some of the chief reasons for that growth.
And with rental rates surging as much as 40% in 2021, now may be a good time to buy a home yourself.
Don’t worry, as we’re here to help you get started with a checklist for buying a house. So, keep reading, as it can guide you throughout your journey.
Set a Realistic Budget
One of the most crucial tips for buying a home is establishing a price you can afford.
For your reference, the median home price in the US, as of 2022, is now over $400,000. However, that’s only the median, meaning half of all other homes for sale cost less.
So now that you know how much buying a house can cost you, it’s time to check your finances. Then, factor in your estimated monthly mortgage payments. That can help you set a home buying budget range that won’t strain the rest of your household expenses.
Set Aside a Down Payment
One of the best advice for home buyers is to save as much as possible for a down payment. The more you can put toward it, the more equity you can have in the house. Most importantly, the larger your down payment, the less money you have to borrow from a lender.
If you can, aim for at least a 20% down payment. So, if you’ve settled on a $300,000 home, your goal should be to save $60,000.
Get Pre-Approved for a Mortgage
Mortgage pre-approval involves completing a mortgage application form from one or more lenders. They then verify all the information you provide, including your outstanding debts. You can also expect them to conduct a credit check for additional verification.
If you pass their “exam,” one or more lenders then issue you a pre-approval letter. It contains an offer with a specific amount of how much they’re willing to lend you.
Start Looking for Your New Home
Now that you know how much outside financial help you can get, you can begin shopping for your new home. Start by looking at real estate listings that meet most, if not everything, that you want your new home to have.
For example, if you want a 3-BR house with a lawn or yard, use those features as a starting point for when you house hunt.
Complete Your Mortgage Application
Once you’ve found your new home, negotiate with the seller and then make an offer. You can hire a real estate agent or realtor to help you throughout this process.
Then, as soon as the seller accepts your offer, you can finalize your mortgage application.
Use This Checklist for Buying a House
As you can see, there are many steps involved in purchasing a home, considering how expensive it is. For the same reason, it’s imperative to prepare as much as possible before making an offer. Otherwise, lenders might deny your loan application, or the seller may choose not to sell to you.
So, to prevent those from happening, be sure to use this checklist for buying a house.
Are you looking for other real estate or home-related guides like this? Then please feel free to browse our latest posts on these topics!