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There are a few steps you can work into the homebuying process to help ensure you get a solid home and mortgage. But, the process can be fast-paced which makes being prepared key. As you plan ahead, here are 10 things to put on a checklist when buying a new home.
1. Evaluate your finances
The first item on your checklist should be to determine if it’s the right time for you to buy a house. Do this by asking yourself a few financial questions such as:
- What is your current credit score? A low credit score usually results in a higher mortgage rate. If that’s a hurdle, there may be ways to prepare your credit before you apply for a loan. You can also consider buying discount points (an extra upfront cost) from a lender to lower your rate.
- How much house you can afford? A mortgage calculator can help you settle on a number or a mortgage lender can Pre-Approve you to give you an estimate.
Get Pre-Approved with Mr. Cooper. It’s free and only takes a few minutes.
2. Calculate an affordable down payment
Settling on a down payment is crucial to your checklist for buying a home because it can dictate your new home’s cost. Homebuyers often think they need 20% down, but many pay much less thanks to low down payment mortgage options. This makes it possible to afford more home for less. For example, to buy a $300,000 home with 20% down, you’ll need $60,000 ($300,000 x 20% = $60,000). But if your loan allows a 3.5% down payment, you’ll only need $10,500 ($300,000 x 3.5% = $10,500). If you qualify for a VA loan, they can allow even less down—0%.
To determine your down payment and other funds you’ll need at closing, the Consumer Financial Protection Bureau (CFPB) suggests:
- Adding up your total available savings.
- Then subtracting what “you want to set aside for other savings goals, moving costs, and potential renovations to your new home.”
- Then, the CFPB suggests subtracting an “emergency cushion”—roughly 3–6 months’ worth of monthly costs. What’s left is what you can pay upfront at closing.
3. Interview mortgage lenders
The mortgage process can involve a lot paperwork, loan types, and last-minute changes, so you’ll want a reliable mortgage company. To find the best lender for you, prepare a list of interview questions to ask lenders. For example, if you’ll want a quick response on a loan approval, ask if they have in-house underwriters.
4. Get a Verified Approval
The most time-sensitive item on your checklist when buying a home is making an offer. It’s important to be ready to make an offer during or soon after viewing a home. One way to show sellers you’re a serious buyer is to include a Verified Approval Letter with your offer. These letters are a step above Pre-Approval Letters and include a strong estimate of what a lender says you can afford. Mortgage companies only share Verified Approval Letters after checking a homebuyer’s finances, which can give sellers added confidence in a bid. Additionally, in a competitive market, sellers may require your “highest and best offer.”
Get an initial underwriting approval with a Mr. Cooper Verified Approval and receive an approval letter as early as the same day or next day! It’s fast, free, and shows sellers that you’ve got one of the nation’s largest servicers behind your offer.
5. Hire a real estate agent and inspector who work in the area where you’re buying
Finding the right home can be like finding a needle in a haystack. For expert tips, work with an experienced real estate agent. Hiring one in the area where you want to buy is also ideal. They may know where to find the best deals and what homes to avoid. After you find a home, you’ll also want a veteran inspector to check it out. Inspectors who’ve worked in the area may know about common problems to watch for. A good agent can point you to a few pros to choose from.
Take the stress out of homebuying & selling! With Mr. Cooper’s Agent Assurance* search and choose your agent from one of the most-trusted brands in real estate. With 98% customer satisfaction,** you can feel confident you’re working with the best.
6. Research homebuilders’ reputations (if you’re buying new construction)
Buying from a homebuilder could bring you years of stress-free homeownership. But no builder is perfect and buying new usually means paying more—so protect your investment. Check with real estate agents, other builders, and current homeowners in a builder’s neighborhood on their reputation. You’ll want to know what warranties they offer and if they stand behind them.
7. Plan for how (and when) to walk away
One checklist item everyone should be prepared for is a rejected home offer. Expect that your bid may not be accepted and be ready to walk away if a home doesn’t pass inspection. Think ahead about where you can live in the short term if things fall through.
If you need to find another motivated seller, check into expired listings. These are real estate listings that timed out of their real estate agent’s agreement. These houses may need TLC or weren’t priced right when they went on the market. These sellers may be more negotiable to get their houses moving again.
8. Get an estimate of your loan fees and costs
The fees and upfront costs associated with closing on a sale can catch some buyers off guard. Create a spot on your checklist to ask your lender what costs will be associated with your mortgage. Some common fees include loan origination fees, a title search fee, an appraisal fee, homeowners insurance, and property taxes.
9. Prepare your loan documents
Make a mortgage documents checklist to get ready for your mortgage application. You’ll need some documents handy for a lender like identification, recent tax returns, and your signed contract.
10. Create a moving plan
While this is one of the last items on your “buying a new home checklist,” it can seem like the most difficult. Moving takes time, energy, and is usually an added expense for packing materials, rentals, or a moving service. For some great money-saving moving tips, check our blog “How to Reduce Moving Costs and Move For Free.”
A final item for your moving plan? Check out Mr. Cooper® RightMove. It takes the stress out of buying and selling so you can focus on the good stuff. From house hunting to moving day, we have the tools and know how to help you make your best move yet.
Ready to get started? Get in touch with one of Mr. Cooper’s Mortgage Professionals at Mr. Cooper. We can help you find the right loan for you! Call us or apply online.
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* 98% overall program satisfaction and 97% overall agent satisfaction: customer satisfaction claims are based on 2020 Realogy surveys of customers who bought or sold a home using a program serviced by a Realogy Advantage Network agent or using a Realogy Advantage Network agent.
Mr. Cooper® Agent Assurance Terms and Conditions
Mr. Cooper® Agent Assurance (“Program”) is offered by Mr. Cooper affiliate Xome Realty Services LLC. (“XRS”). Referrals to XRS may provide a financial benefit to Mr. Cooper. Advertised offers are offered by Realogy Lead Management Services, Inc. after closing of the purchase or sale of a property using a Realogy-introduced real estate agent. Cashback bonuses available in most states. Cashback bonuses are not available in Alaska or Oklahoma. Offers not available for employer-sponsored relocations or transactions in Iowa or outside the United States. In Kansas and Tennessee, Realogy will issue a MasterCard® MAX gift card. In Mississippi, New Jersey, and Oregon, a commission reduction may be available at closing. Cashback bonuses are not available in certain transactions with restricted agent commissions (including many new construction, For Sale by Owner, or For Sale by iBuyer transactions). A Program-referred agent can help identify transactions where the cashback bonus is not available. The amount of the cashback bonus is based on the purchase or sale price of the property. Please check with Realogy for details. Program terms and conditions are subject to change at any time without notice. Additional terms, conditions, and restrictions apply. Real estate commissions are negotiable between agent and consumer. Mr. Cooper® Agent Assurance is a service mark of Nationstar Mortgage LLC.
You are not required to use a real estate agent referred from the Program as a condition of receiving a loan from Mr. Cooper. And you are not required to obtain financing from Mr. Cooper to use the Program.
This is an advertisement and not a solicitation for agent representation if your property is currently listed with an agent.
Xome Realty Services LLC, 750 State Hwy 121 Bypass, Suite 100, Lewisville TX 75067. Licensed Texas Broker, license # 9002550. Mr. Cooper® Agent Assurance is a service mark of Nationstar Mortgage LLC.
Realogy Lead Management Services, Inc., dba Realogy Leads Group, a Delaware corporation, located at 175 Park Avenue, Madison, NJ 07940. Licensed broker in the state of Texas. Broker license #9009191.
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** 98% overall program satisfaction. Based on 2020 Realogy surveys of customers who bought or sold a home using a program serviced by a Realogy Advantage Network agent.