Buying a Home Doesn’t Have to be Complicated

August 28, 2019

Buying a home is something most individuals do so why aren’t parents, schools, and mentors educating the younger generation about the buying process? Looking for the perfect home can potentially be one of the most emotional, yet challenging experiences of your life. Everyone has their idea of a “perfect” home, but can you afford it?

Below we are going to briefly discuss the home buying process. For further details, please consult a real estate company and/or a lawyer.


First off, you need to determine how much you can afford. You’re setting yourself up for failure if your budget for a house is more than you can afford and the houses you are looking at are out of your price range. It is suggested to budget yourself so that your bills and expenses make up approximately 40% of your monthly income at most. From this 40%, 31% should be designated to housing. If you have no debt, you can designate a higher percentage towards housing. Spending within your means is essential to living a stress-free life when it comes to mortgage payments. If you purchase a house you cannot afford, your mortgage payments can cause strain in your life.

Check your credit

As discussed in the credit score article (, having a high credit score is crucial to making major purchases such as a home. If you are planning to buy a home and your credit score is not great, you may want to wait a period of time till you can improve your credit score. Having a good credit score can increase your chances of getting approved or even getting better rates on your mortgage if you buy the home.

Save, save, save

Saving is so important to buying a home because you need money in order to buy one! It’s common to put 20% of the house’s value down when you purchase it. For example, if you purchase a $450,000 house, you have to pay $90,000 upfront at 20% down. That’s a lot of money to pay out of pocket, but it is manageable if you start saving early. Putting your savings in an investment vehicle can help grow your funds even further because the more money you have, the better. If you have the ability to put more than 20% down, you will have lower monthly payments and won’t have to pay as much for interest on the mortgage.

Be wary though, ensure that you have money left over after the down payment. There are other costs associated with purchasing a house so being prepared and having money after this big purchase is essential.


Getting preapproval is necessary for buying a house. Basically, preapproval is a breakdown of what the lender is able to give you depending on your income, tax returns, bank statements, and many other factors from your finances. A preapproved mortgage shows you what you can afford which is super important to your search in finding a home.

Now the fun part

Once you know your budget and how much you can afford, begin looking at houses! When you are at this stage, finding a real estate broker can help you find houses, communicate with the selling agent, and help you make decisions on houses.

Making an offer as quickly as possible on a home you love is crucial to increasing your chances at getting the house. Accept the fact that the seller can counter your offer, you can enter a bidding war, or someone else’s offer could be accepted. Eventually an offer on a house you choose will be accepted and you will move forward towards the closing.

Apply for a Mortgage

Applying for a mortgage can be super intimidating. It is suggested that you use a mortgage broker because they can find the best mortgage rates for you. Next, it is advised that you set up a home inspection to determine if there are any structural issues or damages that may deter you from buying the home. It is suggested that you attend the inspection and walk through to see firsthand how the inspection goes.

If all goes well with the inspection, you can pick out a mortgage that works well for you. Once you picked a mortgage, the bank will do an appraisal to ensure that the amount you are borrowing is accurate to the properties worth. For example, if you ask for a loan of $100,000 and the property is only worth $50,000, the bank will not approve of the mortgage because the property value is less than what you are buying it for.

After approval

Once the mortgage is approved, you need to look into homeowner’s insurance. Typically, insurance is required for having a mortgage. Before the deal is closed you will do a final walk through to make sure the seller did everything you agreed on such as removing all furniture, repairing any damages, and anything agreed to be left is left. Make sure all the appliances, light fixtures, electrical, and plumbing systems work because if they do not, the homeowner has to pay for repairs or junk removal.

Now you can close the deal! At this meeting, the buyer and seller sit down with lawyers to sign the final papers, transfer the deed, and pay for the home and closing costs. After that, congratulations! You own a new home!