Navigating the Home Buying Process
The home buying process can be daunting for first time and veteran buyers alike. With so many individuals involved in the process it can be difficult keeping it all straight. That is why it is crucial you understand the process from beginning to end.
Let's breakdown the important professionals involved in the Home Buying Process:
Buyer/Borrower- This is you. You are the person that is purchasing the home. You are also considered the borrower, as you likely use a home mortgage loan to borrow the money to buy house.
Lender- This is the person/financial institution that will process your mortgage loan application. They will check your eligibility for borrowing funds to cover the transaction.
Home-ownership Counselor- This professional works for a HUD Certified Housing Counseling Agency. The counselor provides information on how to prepare to be a sustainable home-buyer.
Realtor- The realtor assists you in finding a house, submitting an offer, and completing the purchase contract. They also act as your advocate in negotiations with the seller and their agent.
Appraiser- This professional assesses the value of your future home. This ensures the lender that the property has the value the buyer and the seller have agreed to.
Home Inspector- This professional assesses the structural properties of the home you are buying. They provide you with a full report on all the aspects of the house itself.
Title Agent- This professional works for the title company as an unbiased third party. They ensure that the title to a property is legitimate and will issue title insurance.
This list is not exhaustive as there are plenty of other individuals involved in the home buying process. However, this list is a good start for understanding who the major players are.
Here is the typical home-buying process from beginning to end. We have included the professionals you will be working with at each stage of the home-buying process.
- Get Educated (Homeownership Counselor)
- Take the HUD Certified First Time Homebuyers Class by registering at https://www.avenuecdc.org/homeownership/buying-a-home/
- Prepare your Finances (Homeownership Counselor)
- Work on the 4 Mortgage Readiness Factors (Debt, Income, Savings and Credit) to ensure that you are a good candidate for a home mortgage loan.
- Get Pre-Approved (Lender)
- Work with a Lender to confirm your finances are in order. You will receive a Pre-approval Letter that tells you and your Realtor how much you can borrow.
- Select a Realtor (Realtor)
- Research and select a local realtor that specializes in the type of home you are looking for (condo, single family house, town-home). Consider the type of loan you are approved for (FHA, VA, USDA, Conventional) when selecting a realtor.
- Shop for a Home/Make an Offer (Realtor)
- Work with your realtor to find a house that fits your desired specifications within your pre-approved loan amount.
- Get a Home Inspection (Home Inspector)
- Hire a licensed residential home inspector to conduct a thorough inspection of the property you are looking to buy.
- Apply for a Mortgage Loan (Lender)
- Compare at least 3 mortgage lenders to see who will offer you the best mortgage loan for your needs. (link to shopping for a mortgage loan article).
- Apply for Down Payment Assistance (Homeownership Counselor & Lender)
- Ensure that your lender works with the specific type of program you are applying for.
- Get an Appraisal (Appraiser & Lender)
- The lender will coordinate to ensure that an appraiser comes out to assess a value on the property. Do not forget to ask the lender for a copy of the Appraisal Report.
- Close on your New Home (Title Agent & Realtor)
- Closing will happen at the Title Company with the help of the Title Agent. They will ensure that all the documents you will need to sign are true and correct.
The home buying process can be hard to navigate, especially for a first time buyer. The process is long and involves many different professionals.
Understanding how appropriate professionals help you meet your goal of home-ownership is vital. If you have questions and have not taken our HUD Certified First Time Home-buyer class, give our office a call, 713-864-9099, or sign up here https://www.avenuecdc.org/homeownership/buying-a-home/.