3 Things You Need To Know About How to Buy a House Today

3 Things You Need To Know About How to Buy a House Today

Executive Financial Group
Executive Financial Group
Published on March 30, 2022

3 Things You Need To Know About How to Buy a House Today

If you’re ready to become a homeowner, you may be wondering what you need to know about how to buy a house today. While the process of buying a house can seem complicated, when you break it down step-by-step and have a trusted professional to guide you through the process, it can be painless.

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It's critical not to skip the fundamentals to better understand how to buy a house, so we’ll break down the whole process for you. Let's dive in by exploring why you should choose homeownership over renting.

How To Buy a House: Step by Step

Buying a property is life's biggest investment, so being certain of your choice is a vital first step. Think about why you want to own a home, which benefits appeal most to you? Are you financially ready for a mortgage? And do you understand all the steps throughout the process? Let’s take a look at what to expect. 

1) The many perks of owning a home

Whether you're hoping to say goodbye to your landlord, or you're ready to start a new chapter, the decision to buy a home can provide you with wealth-building power and greater flexibility in your life. Did you know that the average homeowners net worth is forty times that of a renter?

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Let's explore some of the other key advantages of homeownership:

  • Predictable monthly payments mean more stability in housing costs
  • An appreciating investment that builds equity
  • Builds long-term wealth
  • A source of ready cash
  • The possibility of various tax advantages
  • Helps build credit
  • Freedom to personalize
  • The ability to increase value with renovation or upgrades

You can't do that with renting. Oh, and I haven't even mentioned the potential to generate income with the purchase of a multi-family or other investment property. The possibilities are endless!

2) How to get ready for a mortgage

Alright, so you've nailed down your why. You're ready for more financial security, and homeownership is the way to go. Now it’s time to gather everything you need to get ready to apply for a mortgage.

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Here's a simple list of Dos & Don'ts to help you start strong. Let's begin with what you should do:

  1. Gather pay stubs, prior tax returns, banking statements, and other important financial documents. Keep the originals and be sure to be able to access them easily. If you’re self-employed, there may be other documents needed as well. 
  2. Make your earnest money deposit from your own personal bank account or acceptable gift funds. Notify your Loan Officer if you plan to receive gift funds.
  3. Provide all documentation for the sale of your current home, if applicable.
  4. Notify your Loan Officer of any employment changes such as a recent raise, promotion, transfer, or change of pay status.
  5. Keep your spending to reasonable levels, pay all bills on time, and sustain manageable credit balances. Be aware that a new credit report could be pulled just prior to closing.

To be successful in your home buying journey, it's important to not do the following before applying for a mortgage:

  • Close or open any asset accounts or transfer funds between accounts.
  • Open new lines of credit or co-sign any loans.
  • Deposit any monies outside of your payroll, particularly cash or sale or personal property.
  • Change jobs, employers, or income streams.
  • Make any large purchases - such as a new car, furniture, appliances, etc., or create any new liabilities.

If you think any of the above will happen during the process, please contact your loan officer first to discuss the impact on your loan qualification.

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3) The 6 steps to getting a mortgage

If you've ever wondered about how to buy a house, I've got you covered with these easy-to-follow steps:

1. Initial consultation with The Byron Mortgage Team. This will cover how long you plan on living in the house, how much of a down payment you will need, and how much you want your monthly payments to be.

2. Apply for loan pre-approval. This will simplify the home buying process from the start and help you determine how much home you can afford before you start shopping for homes. It also lets sellers know you're serious about purchasing a home.

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3. Processing. Your application is carefully processed and evaluated by a Loan Processor. They will review your documentation and order your appraisal. Depending on your situation, they may request additional documentation during this step.

4. The underwriting phase begins. The underwriter reviews your loan file to ensure all guidelines are met for the specific loan program and issues a loan decision. Once your mortgage has been approved and all conditions have been cleared, your loan is moved to “Clear to Close” status.

5. The pre-closing phase buttons everything up. You will receive a loan commitment letter that contains details of your loan, including the rate, amount, and term of the loan and any outstanding conditions that need to be addressed before the file is sent to closing.

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6. Closing! During closing, you will sign a variety of final documents. Be sure to bring a valid Photo ID and proper form of payment to cover down payment, closing costs, prepaid interest, taxes, insurance, or any additional costs.

Congratulations! You're officially a homeowner.

These may seem like many steps to take, but when you partner with The Byron Mortgage Team, you get the advantage of being guided through the process each step of the way.

My team makes it easy to reach your dreams

Throughout my career, I've had the pleasure of helping many renters become homeowners and enjoy all the benefits that come with homeownership. If you are ready to take the first step to becoming a homeowner, I am ready to guide you through the process. Contact me with any questions.

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Executive Financial Group
Executive Financial Group East Greenwich
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(401) 735-8100

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