How do I buy a home?

Question

My husband and I want to buy a house after our lease is up at our rented house. The lease still has 5 months on it. how soon should we start looking? Should you get aproved for the loan before looking? Also, Does the down payment have to paid in cash upfront?

Answer 1

Start the process now.

Your first step is to get pre-approved for a loan. This is a process by which you give a lender your information and they tell you how much they will lend you. This is not a committment on their part, but more of an estimate. If, during underwriting, they find something out that you didn't report or if you do something stupid like buy a new car between pre-approval and closing they will not lend you the money.

After finding out how much they pre-approve you for, make sure the estimated payment would be comfortable. I have always been pre-approved for much more than I would be comfortable paying back. This is a key step. Don't get in over your head.

Once you have an idea of price range, start shopping. It is the most expensive purchase you will ever make, so make sure it's the right house. Look at dozens of them.

Yes, the downpayment is cash at closing (not before, you can get pre-approved and sign a contract without the full downpayment).

From contract signing to closing can take as much as 60 days which is why you really need to start looking now!

good luck!

Answer 2

I am going through this at the moment. If you put an application in before you start looking they give you an amount which they are prepared to lend you, then you can attend auctions as well as other sales and know what you can spend. It takes about a week for an application to be approved and if you are not careful about your real estate, they will sell to the highest offer. So my recommendation is put in an application now then look, then all you need to do is submit a inspection report to receive your money.