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Steps for Buying Your Home

By March 14, 2023No Comments
Steps for Buying Your Home - Close Up of Key with House Shaped Key Chain in the Door with a Couch and Living Space in the Background

Are you ready?

Buying a home is a big commitment, so it’s important to consider your goals for the next several years.

  • Will you be purchasing with a partner and are you on the same page?
  • Is your household facing significant changes such as
    • Starting a family and/or adding to your household ○ Retiring and/or Downsizing
    • Relocating
    • Planning Space to Work from Home

1. Set a Budget

  • Determine Your Maximum Budget
  • Gather Financial Document
  • Get Pre-Approval with a Mortgage Lender
  • Evaluate Your Budget
    • Include property taxes, insurance premiums, interest rates and closing costs
      • Closing costs are typically 2-5% of your purchase price
    • Make a Downpayment plan
      • Use a downpayment calculator to evaluate how much you want to put down. Keep in mind putting less than 20% down may increase your monthly payment because you will have to pay mortgage insurance.
      • Determine if you are eligible for any first-time home buyer programs in your state
      • Consider if you have any gift money to put towards down payment

2. Find a Realtor

  • Consider the following factors when choosing a realtor
    • Experience
    • Credentials
    • Properties handled
    • Familiarity with neighborhoods of interest
    • Client testimonials

3. Begin Your House Hunt

  • Select your search area
  • Make a list of “must-haves”, “nice-to-haves” and “nevers”
  • Schedule viewings
  • Take photos along the way

4. Make an Offer

  • Decide your down payment
  • Submit your offer
  • Counteroffer if necessary

5. Enter Escrow

  • Schedule a Home Inspection
  • Complete Mortgage Underwriting and Approval
  • Mortgage Lender schedules Home Appraisal (To ensure your home is worth what you will be paying for it)

Financial Documents Typically Needed for Mortgage Approval:
W-2 forms from the past two years (possibly more, if you’ve changed employers).
Pay stubs from the past 30 to 60 days.
Proof of other sources of income (including documentation of any gift money).
Federal income tax returns from the past two years.
Recent bank statements (usually for the last couple of months).
Details on long-term debts like car or student loans.
ID and Social Security number.

6. Protect Your Purchase

  • Select Homeowner’s Insurance
    • We recommend connecting with a local agent you can maintain a relationship
      with. While many online insurance websites market a no-hassle and “paperwork-” free approach, many new home buyers are more comfortable finding an agent who will be available to answer questions and assist with any claims down the road.
    • Home insurance is not a one-time purchase. At each renewal and as needed an independent agent can help you review coverages to ensure you are fully covered for the current value of your new home and valuable possessions.
    • Shop for home insurance with more than one company. For a variety of reasons different companies may offer to insure your home for different premium amounts. You can shop around on your own or you can work with an independent agent who can shop for you with all their partner companies.
    • Make sure your new homeowner’s policy is effective on your closing date.

7. Close on Your Home

  • Review your closing disclosure form (a statement of final loan terms and closing costs).
  • Do a final walk-through.
  • Bring all your paperwork:
    • proof of homeowners insurance
    • copy of your contract with the seller
    • your home inspection reports
    • anything the bank required to approve your loan
    • and a government-issue photo ID. (*Note to newlyweds who just changed their name: That ID needs to match the name that will appear on the property’s title and mortgage.)
  • Bring your down payment
  • Complete Title Search
  • Be prepared to sign your name many times.

8. Move In!

Once you have successfully completed the home buying process you can schedule any planned renovations, move in and enjoy your new space.

* Remember after completing renovations, check in with your insurance agent to determine what if any adjustments should be made to the value of your home and your insurance premium.  Similarly, if you add valuable possessions, make sure they are covered.

Longen Group, LLC offers homeowner’s insurance in Pennsylvania, Delaware, Maryland, New Jersey and Virginia.  We would love to help you set up homeowner’s insurance for your new home.  We work with many insurance companies including Hanover Insurance, Grange Insurance, Travelers, Farmers of Salem, Chubb, Westfield, Selective, Progressive and Safeco.  We can help you find home insurance at any price point from starter home to high-value home.  Give us a call today to discuss your current needs, so you can protect what is most important to you.

Charlie Longen

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