Buying a home is a huge responsibility. You completely own every asset and are responsible for everything like repairs, utility bills, and any other costs associated with it. However, owning it entirely is a big benefit. You usually don’t have to worry about any restrictions, additional fees that come with renting, or more obviously, a landlord. But how do you get to this point?

How do you get to the point of owning a home? Homebuying can be a lengthy journey. It’s a major decision that affects your future greatly and finding the right home takes time. You want to make sure whatever you pick is right for you and your situation. But how do you get there?

Ask yourself: Can You Afford It?

There’s a lot to consider when planning to purchase a house. Before you begin the hunt do some research into your assets and decide whether you’re ready or not. You should look into things such as your income, your credit score, any debt you may owe, liquid assets, and your credit health. You should also think about your willingness to spend most of your time living in one place. If you’re buying a home to invest in, then this won’t be much of a problem for you, but you’ll still be tied down to paying your mortgage and loan.

Be sure to calculate how much you can spend on a home as well. You’ll need to be sure you can afford a mortgage monthly. You can find calculators online to help you estimate just how much you’ll need.

Save some money for a down payment and closing costs

Saving money for a down payment and closing costs is an important step to beginning the process of buying a home. Most loan programs require you to make a down payment, but how much should you save? Many sources like Quicken Loans, The Mortgage Reports, and Ramsey Solutions state you should save at least 20% of the price of the home for your down payment.

Anything less and lenders may consider it risky, so they’ll up the price of your mortgage by adding on private mortgage insurance to cover themselves. You’ll have to cover closing costs as well. This will include fees associated with your home appraisal and searches on your home’s title. These costs also depend on the type of loan you take and the area you live in.

Shop for a loan

There are many loans to choose from. Here are a few:

• FHA Loan: A loan offered by the Federal Housing Administration. This is one of the safest loans for lenders since they’re insured by the government if you stop making payments. You’ll need a good credit score but you can make a down payment as little as 3.5%.
  
  
•  VA Loans: These are loans for veterans, active-duty service members, National Guard members, and surviving spouses that meet all eligibility requirements. VA loans do not require a down payment and are insured by the Department of Veterans Affairs.
  
  
• USDA Loans: Provided by the United States Department of Agriculture, this loan helps to make purchasing a home more affordable for low-income individuals. Compared to conventional loans, lenders can offer lower interest rates if you qualify.

This is one of the most important steps: finding an agent. Your agent is your key to finding the right home. You’ll want to look for an agent that knows the area, has an overall positive reputation, and has plenty of experience. Be sure to weigh out your options by contacting different real estate agents and talking to them about your needs so you can find the perfect one.

Is it possible to buy a house without an agent? Yes, it is, but it isn’t ideal, especially if this is your first time. The process of buying a home is complicated and very taxing so having an agent by your side will help alleviate the stress, and as a buyer, you can usually work with a real estate agent for free. In most cases, the seller pays the buyer’s real estate agent’s commission, which is usually around 3% of the purchase price.

Search for your perfect home

When looking for a house, you’ll want to look at multiple options. Your first house will more than likely not be the one which is okay. You’ll also want to attend in-person open houses instead of virtual ones if you can help. You get a better feel for the house, and it gives you the opportunity to check it out for any issues with things like the plumbing, air conditioning, appliances.

It’s also wise to look out for any signs of mold or leaks in the ceiling and anything else that might need repairing in general. These are all the things you would miss in a virtual tour, so it’s much safer to see the house in person.

Make an offer

So, you’ve found a home you like and you’re ready to make an offer. This is where your agent comes in handy. You’ll need them to put together your offer package to present to the seller. They’ll help you come up with an offer price and gather your preapproval letter and proof of funds for your down payment. You’ll need to make your offer enticing for the seller to increase your chances of buying in this competitive market.

There are some things you’ll need to consider, though. Sometimes sellers will make a counteroffer, and you can either accept it or reject it and move on. This can be difficult, but even if you have to move on from one home, you’re sure to find another one that’s just as good, if not better.

Hire an inspector and get an appraisal

This step comes after you’re officially under contract on your new home! Being under contract means the seller accepted your offer, but nothing is final yet. But you’ve made it past the hardest part of your journey! Yippie!!!

Now that you’re under contract, it’ll take around thirty days before you close on your house and everything finalizes. During this time, you should work through some contingencies. This includes hiring an inspector and getting your home appraised.

Completing a home inspection before purchasing a home is a right you reserve as a buyer and it would be wise to do so. It’s easy to miss certain things during an open house or you may not have been able to catch any issues at all because they aren’t tangible. An inspector can help you cover all your bases and let you know if there are any issues with the house that might make or break the deal. They can look for termites, test for radon gas (a naturally occurring, hazardous gas that originates from the natural decay of uranium, thorium, or radium in the soil surrounding the home), and check the structural integrity of the house depending on its age.

Next is the appraisal. An appraisal assesses the value of the property. This protects you from paying more than the home’s actual value. If the appraisal is lower than what you paid, your real estate agent can assist you with what to do next.

Negotiate repairs and credits

If you find issues with the house, you can negotiate with your mortgage lender before they finalize your mortgage, and you can also negotiate with the seller to pay for the repairs or offer a credit to cover the costs. Talk to your real estate agent if you need some assistance with this.

Close on your home. (Cue the confetti!)

The day is here! It’s time to finalize everything and close on your home. Your next step is to review and fill out the closing documents. On closing day, expect to pay:

• Closing costs
• Property taxes
• HOA fees (if this applies to your situation)
• Home insurance

Be sure to ask questions when you need to, this is a huge purchase so you should make sure you know exactly what you’re signing up for.

This would conclude your journey to buying a home! Although you’ve reached the end, there are still a few things to consider.

Can you afford the extra expenses?

Owning a house is much different than renting. When you own a home, you’re responsible for all expenses. This includes utilities, repairs, home maintenance, home insurance, property taxes, and of course your mortgage payment.

What’s the local market like?

The market has a major impact on what a buyer is to expect. Conditions greatly vary from neighborhood to neighborhood, which is why you should partner with a knowledgeable local agent who can break it down for you and ensure you understand the intricacies of the market.

Wrapping up the process

Buying a home is a grueling process but it’s one that is worth enduring when you’re ready.

Set a budget, pick a lender that’s right for you and get preapproved for a mortgage, and then start looking at different homes with an agent by your side before making your decision. Once you’ve set your sights on a home, make an offer to the seller.

Once you reach an agreement and go under contract, get an inspection and appraisal. Depending on the results of the inspection, you’ll want to negotiate with the parties involved so you protect yourself. Once you’re ready, close on your house and enjoy being the owner of a new home!