The Homebuying Process: How to Get Started Buying a House

Purchasing a home is a big financial decision. For most people, it involves taking out a mortgage loan. A mortgage loan differs from other loans in a variety of ways, so it’s important to be prepared when you’re learning how to buy a house and before you start your homebuying journey. Being prepared means that you can avoid unnecessary stress, financial strain and potential setbacks. We created a list of the top eight steps to buying a house to help you get started.

Our Top 8 Homebuying Tips

Buying a new home can be stressful if you’re not sure what to expect. But once you understand the process, you’ll be able to navigate it like a seasoned homebuyer. Here are a few tips to help you start the homebuying process with confidence.

1. ASSESS YOUR FINANCIAL SITUATION

Before starting your homebuying journey, take the time to assess your current income, expenses and debts. Calculate how much you can afford to borrow to determine a budget for your monthly mortgage payments. By being proactive in your financial health, you can stay within your budget and maintain financial stability.

2. SAVE FOR A DOWN PAYMENT

Saving for a down payment is an important part of the homebuying process. First, you’ll want to set a clear goal on how much you need to save for a down payment. Create a budget and cut any unnecessary expenses. Be sure to automate your savings and keep your down payment funds in a dedicated savings account. You may also want to prioritize paying off any high-interest debts that you may have. Look into a freelance gig or part-time job to help increase income that can go toward a down payment. You can also apply for home purchase assistance or first-time homebuyers programs.* You may qualify to put 0% down toward a home purchase, depending on the loan program. Above all, stay motivated and celebrate your milestones.

3. PAY ATTENTION TO YOUR CREDIT SCORE

Your credit score plays a significant role in the mortgage approval process. Homebuyers should know the importance of maintaining a good credit score and how to address credit issues before applying for a mortgage. Lenders use credit scores to determine the interest rate and loan terms that they offer you, if qualified. Be sure to obtain a copy of your credit report, review it for errors and take steps to improve your credit score if necessary. Paying bills on time, reducing debt and avoiding new credit applications before applying for a mortgage loan can help your mortgage approval process.

4. APPLY FOR PREQUALIFICATION

Applying for prequalification from a lender should be a priority before you begin searching for your dream home. A prequalification provides you with a clear understanding of how much you can borrow, strengthens your negotiation position with sellers and expedites the closing process. Skipping the prequalification step can lead to potential financial complications down the line. Take the time to get prequalified so you can approach the homebuying process with confidence.

5. FIND A REAL ESTATE AGENT

Though you can shop for a home on your own, it’s often easier to work with an experienced real estate agent. Real estate agents are familiar with the buying process and can guide you through each step. They also understand the market and can better help you find the right home for a fair price. Talk to several real estate agents in the area, pay attention to how they respond to your questions and try to assess their overall knowledge of the market. You’ll want to choose a real estate agent who you’re comfortable talking to and who understands what you’re looking for in a new home.

6. GO HOUSE HUNTING AND MAKE AN OFFER

Once you find your real estate agent, it’s time to start looking at properties. If you can, try to view each property that you’re considering in person. This will allow you to picture yourself in the home and help you get a better feel for the space. Once you find a home you love, you’re ready to make an offer. Your real estate agent will help you determine what your offer needs to include, how much is fair and what types of concessions you should ask the seller to consider. They will draft the official offer and submit it to the seller’s real estate agent on your behalf. If the seller submits a counteroffer, you will have the opportunity to begin negotiating.

7. UNDERSTAND THE MORTGAGE TERMS AND FINE PRINT

Make sure that you fully understand the terms and conditions before signing a mortgage. Avoid being blindsided by unexpected fees, rates or penalties by carefully reviewing the fine print. Seek clarification from your lender or a financial adviser if there’s anything that you don’t understand. Familiarize yourself with important details such as prepayment penalties, loan terms and rates. Knowing this will help you make better decisions and avoid any surprises during the life of your mortgage.

8. CLOSE ON YOUR HOME

Once you and the seller agree on the terms, you will be ready to close on your new home. During closing, you will sign all required mortgage documents, pay the necessary closing costs and have legal ownership of the property transferred over to your name. Your real estate agent will be on hand to guide you through the process and make sure that everything is filled out correctly. You will also want to make sure that you have insurance on your new home before you close.

The Final Decision

Keep in mind that every homebuying journey is going to be unique. But the steps you will follow to find your new home and complete the purchase will largely be the same no matter what type of home you’re looking for or where you’re buying it. The key to making sure that your experience is smooth lies in making sure that you’re working with the right lender to finance your home. As soon as you’re ready to start the homebuying process, start exploring your home loan options.

Talk to GECU About Your Homebuying Process

A mortgage is a significant financial commitment, and being prepared can help ensure a smooth homeownership experience. By carefully analyzing your financial situation, shopping around for the best mortgage, paying attention to your credit score, applying for a prequalification and understanding all of the mortgage terms, you’ll be better equipped to make informed decisions and secure a mortgage that suits your needs and budget.

Our GECU Home Loan** professionals have extensive knowledge and can help you find the right loan that fits your needs. Apply for a GECU Home Loan today!

Membership eligibility is required.
*Assistance programs are made available through third-party entities, and are subject to qualification, income criteria, home-purchase price, and property location. Other conditions apply.
**All loans are subject to credit qualification and approval. Property must be located in Texas or New Mexico. Certain fees and conditions apply. Equal Housing Lender.