10 steps to finding your dream home

June 01, 2023 | Alliant Credit Union

Last year, I purchased my first home, and if you’ve ever purchased a home before, you know it can be an overwhelming process. While it might feel jarring, getting a mortgage and buying a home doesn’t have to be complicated. Here are some simple steps you can take to ensure you’re setting yourself up for a successful home buying experience:

Determine how much you can afford

The first step you should take is to determine how much home you can afford. You can do this by reviewing your finances and using this mortgage loan calculator to get a realistic view of what you can afford. Typically, potential homebuyers put down a 20% down payment so that they can forgo purchasing private mortgage insurance (PMI), a type of insurance that is often required for conventional mortgage loan borrowers. Once this information is locked down, you can narrow down the types of properties (house, townhome, condo, etc.) and neighborhoods that fit your price range. The last thing you want to do is spend time looking at homes you cannot afford and feeling let down.

Get prequalified or preapproved for a mortgage

Before you officially begin your home search, research different mortgage options to find a loan officer available for you during the process. Applying for a mortgage is the most important step, and if you haven’t done this before, it can get confusing. Take the time to ask the loan officer questions and answer your application honestly. It asks for things such as income, assets, where you are looking to buy, etc. The questions help the loan officer determine what the bank will allow you to borrow and helps set you up for a more streamlined process.

Note: prequalification and preapprovals expire after a certain amount of time. In today’s market, it can take home buyers up to six months to find the right home for them. Ensure you know when it expires in case your search is longer than expected.

Find a real estate agent that suits you

For me, finding the right real estate agent was one of the most important decisions to make. This person will be your advocate and with you through the entire process. The right agent will take the time to understand who you are, what you are looking for and will do what they can to get you your dream home. My agent was a crucial part of my home buying process, and a year later, they still reach out to see how I’m enjoying my home.

While recommendations from family and friends may seem easy, real estate agents aren’t one size fits all. Find the one that fits your needs and is on your side – and don’t be afraid to “fire” an agent if they aren’t keeping your best interests at heart.

Start your search for your new home

This was the most exciting part of my home buying process. My experience was a little unique in today’s market as it only took me a handful of home tours and less than a month to find the home I wanted, but going into this step with an open mind is key. Touring homes in different neighborhoods, layouts, etc., will help you determine your absolute must haves/have nots and what you can compromise.

I went into my search wanting a fully updated home with no renovations; however, that quickly changed when I realized I would never be fully satisfied. Instead, I compromised on a neutral home with basic updates and anything that could be changed was my decision.

There are many different websites you can check out to see which homes are on the market. Still, your real estate agent will also watch their databases for homes becoming available to help grant you the best opportunity to see homes that fit your preferences.

Hire a lawyer

Hiring a lawyer is a crucial step in this process as they’ll review the contract before signing, other documentation throughout the process, and be present at the closing and can help determine if there’s anything questionable in the paperwork. Take the time to research a lawyer with positive reviews and familiarity with the home buying process. If you’re unsure of what to look for in a lawyer, reach out to your real estate agent for recommendations. They may have recommendations of specific lawyers they’ve had positive experiences with during previous cases.

Apply for your mortgage and hand in your offer

You’ve found your dream home! The first thing you’ll do after letting your agent know that you’d like to make an offer is to reach out to your loan officer to officially apply for a mortgage. The loan officer will review all your options with you, from loan programs, rates, terms, and fees, so that you feel confident when making final decisions. The not so fun part begins as you’ll sign various documents like your proof of income, down payment funds, etc. Once you have done that, your loan officer will present you with your loan, and your agent will prepare your offer letter to present to the seller.

Schedule the property appraisal and home inspection

Congrats your offer was accepted! Next, you’ll coordinate with the seller’s real estate agent or the property owner to schedule the appraisal, which the buyer (you) pays for. The appraisal process takes about two weeks from the time of order to completion. Ideally, you’ll also schedule the home inspection (unless you buy “as is”) in the first week or two, as this could be a make-or-break decision.

Prepare for closing

Now that your loan has been cleared to close, you’ll schedule the closing date. Leading up to this you’ll coordinate wire transfers for your down payment and closing costs. Work with your real estate agent, loan officer and lawyer to make sure that you have everything ready for your closing date.

Close on your new home

You’re almost at the finish line! Your closing will be held at the title company and should take 60-90 minutes to complete. While you’ll be signing many documents at the closing, the end result will be worth the hand cramp.

Move into and celebrate your new home

Congratulations on completing the home buying process. Now that you have officially closed on your home, it’s time to move in and begin your new chapter. The overall process can be scary, overwhelming, and intimidating, but remember how great you’ll feel once it’s all said and done. Knowing that I purchased my first home and had a dedicated support system with my real estate agent, loan officer and lawyer, made me feel so much more confident that I made the right decision.

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