The Homebuying Process

8 simple steps to homeownership.

Each step below includes a brief description followed by useful links to details and resources. Homebuying360 - powered by CU Realty Services - includes a robust property search engine, detailed home sales data, and a list of approved, local Realtors®.

 
  1. Check Your Credit

    The term "credit" refers to your ability to secure a loan based on your ability to repay. Obtain a copy of your credit report from all three credit bureaus. Review your credit report carefully. Address any negative items and/or errors that can result in a lower credit score; an important number that affects your ability to get a loan, as well at the interest rate you will be offered. Credit scores range from 300 - 850 (the higher, the better).

    Learn More   Get Your Credit Report Credit Resources
     

  2. Obtain Your Pre-Approval

    Mortgage pre-approved (different from a pre-qualification) entails having a loan officer review your financial information, including your credit, income, assets and liabilities (debts) in order to provide written proof of how much you can borrow. With your pre-approval in hand, you can then start shopping for homes. This will save you time and effort - and the potential frustration of finding your dream home, only to discover you can't afford it.

    Learn More  Why Get Pre-Approved? Lender Fee Comparison
     

  3. Research The Market

    Start educating yourself on the areas and neighborhoods that interest you. Things to consider include schools, your commute, amenities (grocery store, coffee shop, parks, etc.), types of housing (detached/single family homes, townhomes, condos, etc.), appreciation, and prices. It's best to begin with the area, as opposed to the house. It does you no good if you find what you think is your ideal home, only to later learn that it's next to the city dump.

    Learn More Research Resources MD School Boundaries
     

  4. Find The Right Realtor®

    This is such an important step and every Realtor is different. Given the complexity of the home purchase process, it is vital to select a Realtor who is experienced, knows the local market, and - perhaps most importantly - is an effective communicator. Between viewing homes, negotiating with the seller, and all the paperwork, there will be a lot of back-and-forth between you and your agent. Make sure you choose a Realtor who can and will communicate on your terms, returns calls/emails/texts in a timely manner, and is proactive.

    Learn More  Questions to Ask  Realtor Ethics
     

  5. Search For Properties

    Your Realtor will identify properties for you to view, based on the criteria you provide her/him. But you can also view the same inventory of homes for sale online, and let your Realtor know of properties you'd like to see. Make sure you're searching within your price range, per your pre-approval (see step #2).

    It's a good idea to view many properties in order to get a sense for what you get for the price. When viewing properties, be sure to tell your Realtor what you like/don't like about each house. This helps her/him narrow the field and find a better match.

    Learn More When Viewing Houses  Search Tips
     

  6. Make An Offer

    Your Realtor will write the offer, which will include the purchase price, the type of financing, any contingencies (such as a home inspection), the proposed closing date, etc. You and your Realtor will work together to determine your offer price based on a number of factors; the most important of which are the comparable sales figures, or "comps". This is a list of like properties (similar type, size, etc.) in the area that have recently sold. Comps are the best measure of a property's market value.

    Your offer must also include proof of funds - your pre-approval letter (see step #2). This shows the seller that you are financially capable of purchasing the property. You must also include an earnest money deposit (typically around 1% of the purchase price); a personal check you submit with your contract that shows the seller you are serious about buying their property. 

    Learn More Negotiation Success Contingencies
     

  7. Apply For A Mortgage

    Once your offer is accepted it's time to apply for a mortgage. This involves a much more detailed look at your finances. You'll submit income information, bank statements, copies of tax returns, and other financial information. 

    Your lender is required by law to provide a Good Faith Estimate (GFE) of the costs associated with the loan within three business days of your application. You will receive the final cost details just prior to closing. You will also receive an estimate of your monthly mortgage payment or PITI, which stands for Principal, Interest, Taxes and Insurance - the four components of your monthly payment.

    Learn More Sample GFE Questions to Ask a Lender
     

  8. Close The Transaction

    The closing takes place once all details of the purchase have been finalized, including an appraisal of the home's value. Your Realtor will work with the title company and the seller's agent to schedule the closing, which often takes place at the title company's office. You will bring your ID and a certified check for the closing costs listed on your final HUD-1 statement. The title attorney will conduct the closing and explain each of the forms you must sign. You'll sign and initial a lot of documents but, when it's over, you'll have the keys to your new home!

    Learn More  Closing Cost Calculator Video: the Closing Process
     

This is just an overview. Get all the details, including a breakdown of closing costs, information on improving your credit, advice on finding the right Realtor, tips on viewing properties, and more by downloading the complete Home Buying Guide below.

Download Your Home Buying Guide

 

Searching for Properties →

 

Program rebates are awarded to buyers and sellers who select and use an Agent in the CU Realty Approved network. Members are not eligible for the rebate if they select an agent outside the CU Realty network. Using your Credit Union for a mortgage is not a requirement to earn your rebate although they are often your best choice for mortgage options. Rebates/incentives are available in most states; however, are void where prohibited by law or by the lender. Rebate examples shown are based on a 3% commission rate. Since agent commissions vary, your rebate figures may adjust accordingly.

 

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