Buying a Home, Dream, Story, Reality .

Before you begin shopping for properties and comparing mortgage options, you should make sure you’re ready to be a homeowner.

Below are some of the factors that lenders and homeowners consider:

Income And Employment Status

Your lender will look at your work history (about 2 years) to make sure your income source is stable and reliable.

If you’re on payroll, you’ll likely just need to provide recent pay stubs and W-2s. On the other hand, if you're self employed, you’ll need to submit your tax returns and other documents.

Debt-to-Income Ratio

Your DTI helps your lender see how much of your monthly income goes to debt so they can evaluate the amount of mortgage debt you can take on.

At SYO, our mortgage lenders will review your debt-to-income ratio with you.

Down Payment

A down payment is the first major payment you make on your loan at closing.

Closing Costs 

Closing costs are fees that go to your lender and other third parties in exchange for creating your loan and are paid before moving in.

Credit Health

Your credit score plays a huge role in what loans and interest rates you qualify for. Your credit score tells lenders how much of a risk you are to grant a loan.

Once you have nailed down that you’re ready to buy a home, it’s time for you to set a budget.

One way to calculate your budget is to calculate your DTI ratio.

Look at your current debts and income in order to consider how much money you can reasonably afford to spend each month on a mortgage.

Not sure how to calculate your debt-to-income ratio? Check out our calculator!

To get pre-approved, you need to apply with your lender.

The pre-approval process involves answering some questions about your income, your assets, the home you want to buy, and a credit check.

Your lender will give you a pre-approval letter that states how much you’re approved for based on your credit, assets and income.

Your real estate agent represents you and helps you understand how to buy a house. Your agent will show you properties, write an offer letter on your behalf and assist in negotiations.

Real estate agents are local market experts and can also advise you on how much to offer for each property.

It’s possible to buy a house without a real estate agent, but this isn’t recommended, especially for first-time buyers.

The home buying process can be complicated, but having an agent by your side can help you navigate the real estate market, submit a legally sound offer and avoid overpaying for your property.

Your real estate agent will help you look for homes within your budget. It’s a good idea to make a list of your top priorities.

Here are some things you might want to consider when shopping for a house:

• Price
• Square footage
• Home condition and possible need for repairs
• Access to public transportation
• Number of bedrooms
• Backyard/swimming pool
• Local entertainment options
• Local school district ranking
• Property value trends
• Property/real estate taxes

When you decide to make an offer on a home, you must submit an offer letter in writing.

Your offer letter includes details about yourself (like your name and current address), the price you’re willing to pay for the home and more.

It will also include a deadline for the seller to respond to your offer.

Lenders usually don’t require a home inspection to get a loan, but you should still get an inspection before you buy a property.

A home appraisal is a review that gives the current value of the property you want to buy. You must get an appraisal before you buy a home with a mortgage loan.

Lenders require appraisals because they can’t lend out more money than a home is worth. If the appraised value comes back lower than your offer, you might have trouble getting financing.

You should do a final walkthrough in your new home before you close, even if you’re 100% committed to the property.

This time allows you to check and make sure that the seller has everything in order.

Your lender is required to give you your Closing Disclosure, which tells you what you need to pay at closing and summarizes your loan details, 3 business days before closing. Read through your Closing Disclosure and make sure the numbers don’t vary too much from your Loan Estimate, which you would have received no more than 3 business days after your initial application.

Once you’ve reviewed your Closing Disclosure, it’s time to attend your closing meeting. Bring your ID, a copy of your Closing Disclosure and proof of funds for your closing costs.

You’ll sign a settlement statement, which lists all costs related to the home sale. This is when you pay your down payment and closing costs. You’ll also sign the mortgage note, which states that you promise to repay the loan. Finally, you’ll sign the mortgage or deed of trust to secure the mortgage note.

After closing finishes, you’re officially a homeowner.