10 steps for buying a home

If you’ve never purchased a home before, one obstacle you might face is simply not knowing what to expect. The mortgage process can feel like a confusing, difficult endeavor, but it doesn’t have to be. Although it is more complicated than getting a car loan, getting a mortgage is definitely not as complicated as many people assume. We talked to Alliant’s mortgage experts to break down the home buying steps to help demystify the mortgage process.

Step 1: Determine how much home you can afford

Take the time to figure out what you can afford. Look at what you have available for a down payment – you don’t always need to have 20 percent – and use a mortgage loan calculator to give you a more realistic picture of what you can afford. Being armed with this knowledge will give you the opportunity to check out properties and neighborhoods in your price range, which will save you time and help lessen the disappointment of looking at homes you can’t afford.

Step 2: Talk to a mortgage loan officer and get prequalified or preapproved

But, before you begin your home search, it’s important to talk to a loan officer and get prequalified or preapproved for a mortgage. Spend 20-40 minutes (or more, if necessary) asking your mortgage loan officer questions to make sure you’re well-informed and comfortable moving forward. A good loan officer will also ask you questions, and provide different loan program options and rate options that will affect your final costs. Prequalification can take place during that initial phone call with your loan officer. Preapprovals, which require you to submit information about your income and assets, should typically take 2-5 business days. However, it could take a little longer if you’re self-employed because income review for self-employed applicants is a bit more complex. It’s also important to note that prequalifcations and preapprovals have a limited shelf life, so make sure you ask your loan officer when they will expire.

Step 3: Find a real estate agent

The easiest and best place to start your search is by asking your loan officer if they have a preferred real estate agent program. For example, the Alliant Home Rewards Program pairs you with a local real estate agent and even offers a cash back rebate when you close on your home. Even if your lender doesn’t have a program, they might be able to refer you to trusted agents they’ve worked with in the past.

Step 4: Search for your new home

This is usually the most fun of all the home buying steps. While finding a real estate agent can be very quick, finding the right home may take a few days, weeks or even months, depending on your personal situation, timeline and housing market trends. You can also use real estate apps and websites to search for your new home.

Step 5: Apply for your mortgage

Once you find your dream home, you’ll get back in touch with your loan officer to formally apply for a mortgage. The loan officer will once again review loan programs, rates, terms and fees – like they did in step 1 of the home buying process – so you can make final financing decisions. You’ll provide a signed sales contract along with other documents like proof of income and proof of down payment funds. This part of the mortgage process usually takes about 60 minutes.

Step 6: Work with your loan processor

Your mortgage application will be assigned to a loan processor. They’ll  work with you to provide the answers and documentation needed by the loan underwriter to get your loan cleared to close. Normally this part of the mortgage process takes about 2-3 weeks from start to finish and is done while step 7 is also in progress.

Step 7: Schedule the property appraisal

Coordinate with the seller’s real estate agent or the property owner to schedule the appraisal, which is paid for by the buyer (you). The appraisal process takes about two weeks from time of order to completion.

Step 8: Prepare for closing

Once your loan has been cleared to close (hooray!), you’ll work with your lender’s closing department to schedule the closing. You’ll also work with your loan officer and loan processor to set up wire transfers of funds for the down payment and closing costs. Remember that closing costs are often made up of two parts, lender fees and third-party fees.

Step 9: Close on your new home

Home closings are usually held at the title company or your real estate attorney’s office and generally take 60-90 minutes. And make sure your hand is well-rested because you’ll be signing a ton of documents.

Step 10: Move into your new home

Congratulations, you did it! Most lenders will send a survey after closing so you can rate your overall satisfaction with the mortgage process. The survey should also have questions about your loan officer and loan processor since you will have interacted with them the most. Hopefully going through the mortgage process helped you establish a good relationship with your loan officer. That way, when you’re ready to look for a new home or refinance your current mortgage, you have someone to turn to.

The mortgage process is not as difficult or confusing as you may think. A great loan officer working for a reputable organization can make all the difference and will help alleviate your fears and stress. Remember, you don’t have to buy a home until you are ready, but you need information to make the right decisions when you do want to buy.

Maggie Tomasek is the PR & Content Strategist at Alliant. She began her career as a journalist for newspapers in Utica, N.Y., Des Moines and Cincinnati before moving to Chicago in 2009. Maggie is an eight-time Chicago Marathon finisher and a lifelong creative writer with a passion for comedy. Her mom instilled in her a great sense of fiscal responsibility, and her big sister told her to throw that responsibility out the window every once in a while in the name of life experience. So far, that combination of financial advice has worked out pretty well for her.