Step 1: Preparing to buy a home▢ Establish a realistic budget to determine what you are comfortable spending each month. Our mortgage calculator can show you sample monthly payments. Keep in mind that you will also need to pay for real estate taxes and insurance on the property.
▢ Talk with a lender to determine if you’re ready to buy a home, and get pre-qualified for a mortgage if so. Getting pre-qualified gives you a general sense of the loan amount that you’ll likely qualify for, based on the information that you provide to a lender. Our home loan specialists can assist you with this, or if you’re not quite ready to take the next step on your home buying journey, they’ll guide you on how to best prepare.
▢ Figure out your priorities and “must haves” before house shopping. For example, the style of home, size, location, neighborhood, number of bedrooms, bathrooms, etc.
▢ Talk to a few lenders, research and compare mortgage programs, rates, costs and terms. Make sure that you consider affordable mortgage programs offered by our state housing agencies.
Step 2: Obtaining a loan
▢ Attending an approved first-time homebuyer training is a requirement for many first-time buyer programs. If you are leaning towards one of these, sign up for the training early as they can take several weeks to complete.
▢ Obtain a mortgage pre-approval from the lender that you’d like to initiate a mortgage with. This is a more involved step than getting pre-qualified and includes providing a lender with your complete financial background. Pre-approvals are generally required when you make an offer on a home, and can streamline the home buying process.
▢ By getting preapproved, you may even be able to lock in a mortgage rate while you shop for your new home.
Step 3: Finding your home
▢ Work with a real estate agent. They will be able to help you find a home that fits within your budget and must haves. If you do not know one, your loan officer can provide you with referrals to agents that work in the area you are considering.
▢ Wondering if you need an attorney? If so, get a recommendation from your lender. Having one attorney that can work with you on the contract and conduct the closing for the lender can save you time and money. And make sure to contact the attorney before you sign an offer.
▢ Appraiser vs. Home Inspector: An appraiser will be engaged by the lender as part of the loan process in order to determine the property’s collateral value. A home inspector is hired by the buyer (that’s you!) to determine the property’s current condition, if there may be needed repairs or safety concerns. While they sound similar, one is not a substitute for the other. Your real estate agent can recommend home inspectors.
Step 4: Making an offer
▢ Once you’ve found the right home, there are a few things you should consider before making an offer. An Offer to Purchase is a binding contract, so be 100% certain before you sign.
▢ Determine the inspections that you want to have done, repairs and any contingencies that you want to include in the Offer to Purchase.
▢ Review the property-listing sheet thoroughly and make sure to get answers to any questions that you have. For example, is the refrigerator staying in the home?
▢ Decide how much of a deposit you want to put down, when you want to close on the home, and the closing cost credit, if desired. Be sure to discuss closing cost credit with your lender first.
▢ Remember, with real estate there are generally no “verbal agreements”, so make sure to get it all in writing.
Step 5: Finalizing your mortgage and preparing for the closing
▢ Once you’ve made your offer, you will need to finalize the mortgage details with your lender, such as the final loan amount, terms and rate lock.
▢ You’ll also review and sign the Purchase and Sale Agreement. It will contain more detail than the Offer to Purchase, but should be very similar.
▢ In preparation for the closing, you will need to:
- Purchase a homeowner’s insurance policy.
- Obtain a certified bank check for the remainder of your down payment and costs.
Taking the next step on your first-time homebuyer journey
Middlesex Savings Bank is here with a team of friendly, knowledgeable experts who are ready to assist you through every step of the home buying process. We’re proud that our customers voted us first place for mortgages in the 2019 and 2020 Best of MetroWest Awards, the official community choice awards presented by The MetroWest Daily News.
If you’re ready to buy a home, our home loan specialists will help you select the best mortgage option for your needs. If you’re wondering if you’re ready to get started on the home buying journey, we’ll help you determine that too.
Contact our local Mortgage Center at 1-877-672-7654 to speak with a specialist. You may also have a specialist contact you directly by completing a simple form on our website.