Want to make 2020 the year you finally buy a home (or vacation home) in Northwestern Wisconsin? If you’ve been putting it off because you’re intimidated by the process, we’ve got some good news for you—it’s easy! Here are 12 simple steps to take you from dreamer to buyer.
Step 1: Track your spending
Before you buy or even apply for a mortgage, find out where your money goes. How much do you make? How much do you spend? Taking an in-depth look at where your money ends up every month can help you target expenses that could be lessened or even eliminated—freeing up money for your new home.
Step 2: Get serious about saving
Once you know where your money is going, it’s time to trim the fat. What are you paying for that you aren’t using? What could you live without? Where could you reduce costs (think: shopping sales, turning down the heat)?
Now, here’s the trick: take the money you would be spending on those trimmed “fat” expenses and put it into a savings account instead. Since you’re already spending the money, you won’t even miss it, and it’ll add up to your down payment faster than you’d think.
Step 3: Check your credit score
Do you know what your credit score is? If you’re not sure, you probably want to look into this before you go any further, since your credit score is a huge factor in determining what your mortgage will look like. To improve your credit, consider paying off (or paying down) large debts, and make sure you always pay on time.
During this time, you’ll also want to refrain from opening any new lines of credit or making any large purchases, as both can affect your credit and your ability to qualify for a mortgage.
Step 4: Chat with lenders
Once you’ve got your finances in order, the next step is to start talking to lenders. We recommend starting with financial institutions you currently work with, like banks or credit unions. You can also ask for recommendations for local lenders and brokers, as local businesses may be able to offer additional state or city options or assistance programs.
Step 5: Get preapproved for a loan
Talking to lenders has a few pros. First, you’ll get to shop around, comparing rates, fees, and even lender knowledge and professionalism. You’ll also likely hear some different loan options tailored to you—and what your mortgage payments might look like.
Most lenders will also likely want to get you prequalified for a loan. That is, they’ll gather some basic financial information, check your credit, and give you an official letter stating how much they might be willing to lend you. This can be hugely beneficial, both for your personal calculations, and to prove to sellers you’re a serious and qualified buyer.
Step 6: Find a real estate agent
Working with a real estate agent as a buyer comes with a number of advantages—and since the seller pays the agent’s commission, there’s really no downside. And on the plus side, you get an area expert who can help you find the perfect home in the ideal location AND who knows how to navigate the lesser-known details of homebuying, like making an offer, negotiations, a home inspection, land surveys, appraisals, and more.
Step 7: Determine wants & needs
Before you start actually searching homes, take some time to decide what’s most important to you in a home. Is there a minimum number of bedrooms or bathrooms you need? How close to conveniences and amenities do you want your home to be? (Keep in mind, it can get pretty snowy here!)
Once you determine those needs, you can spend some time on not-quite-as-important features you’d like to have in a home—like access to CAMBA trails, waterfront property, or community amenities.
Step 8: Start shopping
This’ll be much easier with an agent—he or she will find out more about what you’re looking for in a home, then let you know which homes in your preferred area meet your criteria. When visiting homes, it’s helpful to take notes or photos to remind yourself what you liked (or didn’t like) about particular homes.
Step 9: Make an offer
Once you find a home you love, you and your agent will sit down to determine a competitive yet comfortable asking price. You’ll submit a Purchase and Sale Agreement, which lays out the details of your offer—price, closing dates, and contingencies.
Once the seller receives your offer, they’ve got three options. They can either accept the offer, reject the offer, or issue a counter offer with modified terms (usually price).
Step 10: Schedule the inspection
If your offer is accepted, you’ll next need to schedule a home inspection. During this time, if any potential or existing issues are uncovered, you have the option to ask the seller to make repairs or lower the price. Should the seller refuse, you typically aren’t obligated to continue with the sale.
If you’re using a mortgage to pay for the home, you’ll also probably have to have an appraisal for the lender. This simply ensures that the home is worth at least as much as the lender is giving you to pay for it.
Step 11: Finalize your loan
If everything looks good, it’s time for paperwork. You’ll work with your lender to submit various financial and personal documents. This can range from bank statements to tax returns to job history documentation. It may seem invasive, but it’s all part of the approval process!
During this time, you’ll also likely start working with an attorney to set a closing date and finalize closing costs.
Step 12: Close!
Once you’re approved and all legal documents are in order, you’ll meet with your agent, your lender, your attorney, and the seller’s representatives to sign the final paperwork, pay your closing costs, and get the keys to your new home.
Ready to Buy a Home in Northwestern Wisconsin?
Are you thinking of buying a home in Northwestern Wisconsin? McKinney Realty is here to help. Contact us to learn more about how we can help you get to know the area and find the perfect home in just the right spot.