Hold your horses, folks! Buying a house isn’t like snagging the latest gadget online with a quick click and next-day delivery. Nope, it’s a marathon, not a sprint! You see, real estate is a different beast altogether. It’s like baking a cake from scratch – you need the right ingredients, the perfect recipe, and a whole lot of patience. But how long does it take to buy a house?
So, you’ve found your dream home? Fantastic! But don’t start packing those boxes just yet. Even after you’ve said “yes” to the house, there’s still a bit of a wait. From the moment you sign on the dotted line to the day you’re jingling those new keys in your hand, it’s typically around 50 days.
1st Step: Get Approved
Ready to take the plunge and buy a house? First things first, you’ll need to get preapproved for a mortgage. This is where the lender takes a peek at your financials – your assets, income, and credit history – to see how much they’re willing to loan you. And with some online lenders, you could have that preapproval letter in your inbox the very same day! This little piece of paper is like a golden ticket, showing sellers that you’re a serious buyer.
But don’t dilly-dally! Preapprovals have an expiration date, typically lasting between 60 and 90 days. Once you’re preapproved, you’ll receive a loan estimate within three business days that outlines all the nitty-gritty details of your loan – the amount, interest rate, and more. And don’t forget to shop around! The Consumer Financial Protection Bureau recommends getting loan estimates from at least three different lenders to make sure you’re getting the best deal.
Before you start the preapproval process, take a good, hard look at yourself through the eyes of a lender. Are there any errors on your credit report? Is your credit card balance sky-high? Think of the preapproval process as your chance to strut your stuff and show lenders that you’re a responsible borrower. So How long does it take to buy a house? It actually depends in how prepared you are. It will be faster if you take action in all the steps of this article.
Here’s a handy timeline to help you prepare for submitting your paperwork for a mortgage preapproval:
6-12 months before: Start saving up for that down payment (if you haven’t already) to show lenders that you’re serious about buying a home. And while you’re at it, take a peek at your credit report and score to get a better understanding of your financial situation. Lenders will be checking out your credit history (and, by extension, your credit score) to see how creditworthy you are. Knowing what’s in your report now will give you a chance to boost your credit score if needed. And when it’s time to get preapproved, you’ll have a better shot at snagging a sweet rate.
3-5 months before: During this time, avoid taking out any new loans or making any major changes (like switching jobs). These could affect your eligibility for a loan. Lenders will be looking at things like your debt-to-income ratio (DTI) to see if you can handle those monthly payments. So keep things steady with your finances, income, and job situation to avoid any delays in getting approved.
1-2 months before: Now’s the time to start getting all your paperwork in order for the preapproval. You’ll typically need things like recent paystubs, two years of federal tax returns, and two months’ worth of bank statements. So get organized and get ready to take the next step towards homeownership!
2nd Step: Find A Home
You’ve got your preapproval in hand and you know how much house you can afford! Now it’s time to start the hunt for your dream home. This is where the fun really begins! You can work with a real estate agent, hit up some open houses, and start scouring the market for that perfect place to call your own.
But don’t get too ahead of yourself – this step can take a bit longer than you might expect. Housing inventory is still tight, so finding the right home might take some time. According to the National Association of Realtors (NAR), the country had a 3.3-month supply of homes in July 2022. That’s up from January’s record low of 1.8 months, but still short of the 5 or 6 months needed for a balanced market.
But don’t let that get you down! Here are some fun facts to keep you entertained while you search for your dream home:
- Some mortgage lenders offer no-closing-cost loans.
- 47% of homeowners are between ages 31-55.
- The US homeownership rate is 65.5%.
- 86% of homeowners use a real estate agent.
And if you’re looking for some extra guidance, why not check out a book on the subject? “How to Buy a House” by Kirstie Allsopp and Phil Spencer is a great place to start.
3rd Step: Make An Offer
You’ve found the house of your dreams! Now it’s time to make an offer. Your real estate agent will be your trusty sidekick, helping you submit an offer that’s competitive, in line with local home prices, and in your best interest. And don’t forget about contingencies – these little clauses can help protect you if you need to back out of the offer.
If you’re able to make an all-cash offer, you could reduce your time to close. No need to secure financing means no dealing with a financial institution. But even all-cash transactions require some waiting as the seller works out all the details and paperwork. So keep that in mind.
And remember, making an offer isn’t always a one-and-done deal. Depending on how hot your local market is, you might have to make a few offers before you find success. NAR data from early 2022 showed that only 25 percent of buyers were successful with their first offer. But times have changed – mortgage rates have risen significantly over the course of the year, so the market isn’t quite as competitive now. So keep at it and don’t give up!
4th Step: Go To Contract And put Down Earnest Money
Your offer has been accepted! Now it’s time to go to contract and make an earnest money deposit. This is a chunk of change you put down in good faith to show the seller that you’re serious about buying the house. Think of it as a little love letter to the seller, saying “I’m committed to doing all the work ahead to close on this house.” So get ready to take the next step towards homeownership!
5th Step: Schedule a Home Inspection
Next up on the road to homeownership: the home inspection. Depending on where you live, there’s typically a set number of days after you sign the purchase agreement to get this done. And if the inspector finds any major issues, you might want to negotiate repairs or seller concessions. But keep in mind, this could add some extra time to the process. So sit tight and let the inspector do their thing!
6th Step: The Closing Process
Now that you’re in the home stretch, it’s time to sit back and let your lender do their thing. They’ll be moving your loan into underwriting, which means you might need to submit some additional documentation to clear your loan to close. And don’t forget about the appraisal – the lender will order one to assess the home’s value.
But keep in mind, that the type of loan you take out could alter the timeline slightly. For example, an FHA purchase loan currently takes one day less than a conventional loan (49 vs. 50), according to ICE Mortgage Technology. And VA purchase loans have historically taken a bit longer to close, due to additional documentation requirements like a VA Certificate of Eligibility.
And if there have been any major changes to your financial situation since you were preapproved, your loan might be delayed. Lenders can get a bit spooked if you change jobs, open a new line of credit, or make any other big money-related decisions between the time you apply and the time they’ll actually give you the funds.
Once your mortgage is approved, your lender will give you a copy of your closing disclosure at least three business days before the closing date. This handy document lists all the loan details, fees, and terms, as well as what you’ll need to pay in closing costs to finalize the purchase.
7th Step: Sign The Closing Documents And Get The Keys
The finish line is in sight – closing day has finally arrived! Get ready to flex those signing muscles, because you’ll be tackling a small mountain of paperwork. And don’t forget about those closing costs – if you didn’t roll them into the loan, you’ll need to pay up now. And make sure to bring a cashier’s check, because personal checks are typically a no-go.
So how long does this final step take? Well, it varies, but plan on spending at least two hours dealing with all the documents. But don’t worry, it’ll all be worth it when you’re holding those shiny new keys in your hand! I believe this article answered your question of: How long does it take to buy a house?
Before You Go – How Long Does It Take To Buy A House?
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