Homeownership Timeline

Here is your monthly timeline to homeownership. It will help a homebuyer get to the closing table smoothly.

Check your credit score.
Determine how much you can afford. (Recommended mortgages should be no more than 20-30% of monthly income.)
Make a down payment plan. (Most conventional mortgages require a 20% down payment. FHA offers loans with only a 3.5% down payment. The U.S. Department of Housing and Urban Development (HUD) provides a list of nonprofit home-buying programs. Check with credit unions and of course, the VA-backed loans if you qualify.)
Banks like you to “season” your money or have stable funds in your account for 60 to 90 days before applying for a loan.

Collect your loan paperwork. Banks are very particular when it comes to mortgage loans, and they demand a lot of paperwork. (See Chapter 2)
If you start collecting these documents now, it will lessen the stress when it is time to get your loan. Bonus: Looking closely at your loan documents each month will also help you stay focused on saving for your down payment and keeping your debt-to-income ratio low.
Research lenders (Your agent can provide contact information for a few mortgage brokers) Mortgage brokers will shop for a competitive loan rate for you among multiple lenders, unlike a bank, which can only offer its own products.

Get pre-approved for your loan. (Ensure it is based on a credit check, not just income-based.)
At this point, if you have been following this timeline, your credit score, paperwork, and down payment should be on track.
Make an appointment with your lender or mortgage broker and bring all your paperwork.
Draft a budget that accounts for mortgage payments, insurance, maintenance, and everything else you have going on in your life.
Make an appointment to meet with your agent.
Let your agent know your requirements and criteria and we can target homes that meet your priorities in your price range.
Start shopping for your new home.
The Realtor schedules a few showings for the upcoming days.

Make an offer on a home.
It usually takes at least four to six weeks to close on a home. So, if you have a firm move-out date, allow enough time to deal with any hiccups that can delay closing.
Start your Contingency Period. (See Chapter 4)
One of the first things you will want to do after an offer is accepted is have a home inspector look at the property. If the home inspector finds something that needs repair, that is a common example of something that can delay closing.

Triple-check that all your financial documents are in order and review all lending documents before closing.

If you have been keeping your documents up to date, and your down payment is in reserve, these final steps are the easiest. Reviewing the mortgage documents is the most difficult and I will guide you through them.
Get insurance for your new home. Do not forget to secure insurance before closing. You will need to bring proof of insurance to closing.
Do a final walk-through of your new home, usually a day or two before closing, to make sure the home is in the shape you and the seller have agreed upon.
Get a cashier’s check or bank wire for cash needed at closing.
The closing company will notify you of what is required at the closing table. Normally 2.5-4% of the selling price. We will negotiate closing costs as part of the buying offer process to have the seller pay a portion of or all your closing costs.

That is it. Congratulations, you are on your way to homeownership!

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