The Process

Understanding the Home Buying Process

Buying a new home is a complicated process, and it’s important to understand the financial steps involved so you can make sure you do things in the most efficient and effective way possible, without costing yourself any more money than you have to. This is 5280 Lend’s forte! We’re happy to guide you through the home buying process.

Step One: Before you Shop

Before you even begin looking at properties, you should do the following:

  • Figure out where your down payment is coming from. Work with your financial advisor to determine both how much you can afford to put down and how much you actually should—these may not end up being the same figure.
  • Decide how much home you can afford. This is a friendlier way of referring to the amount of the loan you plan to take out. Consider that the amount you can afford might not be the amount you are willing to borrow—the lender may approve you for a larger loan than you wish to take on.
  • Examine your credit. Some aspects of your credit score are fairly fixed or slow to change, but there are some things you can do to bring a low score up significantly. Consider paying off any outstanding debt, especially credit card debt, if you are able.
  • Figure out how all this fits into your long term financial plan. This is a much harder question to answer. Depending on what phase of life you are in, you might not currently be thinking about such things as saving for retirement. However, this is still an important part of the home buying process. 5280 Lend can help you examine your financial plan and work out how your home loan fits in.
Step Two: After Finding a Home

Once you’ve found the right home, it’s time to finalize your purchase. Here’s what you should be keeping in mind:

  • The contract should be complete, with every detail agreed upon by every party. Make sure you’ve reviewed the terms and deadlines, so that you know when you need to have things paid and completed, and you know when you can expect the other party/parties to have completed their own responsibilities.
  • Make sure your mortgage lender has everything they need. This should include the loan application and disclosure of terms, your W-2, tax returns, and bank statements, and proof of homeowner’s insurance. If your lender requires anything else, they will let you know.
  • Get your home professionally inspected. You don’t want to finalize the sale and then realize the next day that there are termites in the attic. Often, if a problem is found, the seller will reduce the price and you can use the freed-up money to have the issue fixed.
  • An appraisal report should be completed to verify the value of the home. Your lender will probably order this for you, but check to make sure.
  • Bring your down payment to the table on closing day and get excited—you’re about to purchase a new home!