Congratulations on taking the first step in the home buying process! Here in New Jersey, we have many beautiful places to call home. From the bustling cities, to the quiet suburbs, there is a perfect place for everyone. The process of buying a home may seem daunting, but we are here to help guide you through every step of the way.
Step One: Get Pre-Approved
One of the very first steps when considering purchasing a home, is speaking with a lender to get pre-approved for a mortgage loan. This will give you an idea of how much house you can afford, as well as what kind of interest rate and monthly payments you can expect. Once you have been pre-approved, be sure to ask your lender for a loan estimate which outlines all of these terms in writing.
Step Two: Find Your Dream Home
The fun part begins! Start by browsing online listings or working with a real estate agent to see what is on the market. Once you find a few homes that you like, schedule appointments to go visit them in person and take your time walking through each one. It’s important that you picture yourself living there and that it meets all of your needs.
Step Three: Write an Offer
Now that you have found THE ONE, it’s time to make an offer! Your real estate agent will help draft up an offer based on comparable homes in the area and submit it to the seller for review. If your offer is accepted then it’s time to move on to the next steps! If not, don’t fret, this just means that it wasn’t meant to be and there are plenty more houses out there for you.
Step Four: Attorney Review In New Jersey, we use attorneys instead of title companies to complete residential real estate transactions. Once your offer has been accepted by the seller, you will be assigned an attorney from their office who will represent you throughout the rest of the process.
Step Five: Meet with Your Lender At this point you should already have been pre-approved for a loan, but now it’s time to sit down with your lender and complete a formal loan application so they can begin processing everything on their end. Be sure that you bring all required documentation with you such as identification, pay stubs and tax returns from the past two years, bank statements and asset information.
Step Six: Home Inspection Phase It’s finally time to move onto inspections! Typically there are three separate inspections that need to be completed; a general home inspection which assesses the condition of the property, a termite inspection and lastly radon testing which tests for harmful gases present in some homes. Your attorney will coordinate all three of these appointments and schedule them within a 10 day period so that everything can stay on track.
Step Seven: The Home Gets Appraised The next step is obtaining financing for your purchase which requires that an appraiser visit the property in order evaluate its value and make sure that it matches up with what you are paying for it. Once this has been completed successfully, your loan should get “clear to close” meaning that everything looks good on both ends and settlement can proceed!
Step Eight: Commitment At this point your lender should provide you with a loan commitment letter which contains all final terms and conditions of your mortgage loan including interest rate, monthly payments and closing costs. Be sure to review this carefully before moving forward as it cannot be changed later on down the road.
Step Nine: Clear To Close & Settlement Last but not least is Settlement! This is when title gets transferred from seller to buyer and keys change hands. Prior to this happening though, both parties will need sign all necessary documentation related to the purchase including closing disclosures which outline final numbers such as interest rate, monthly payments etc., title insurance policies and finally deed transferring ownership away from seller into your name! Phew! Now comes the easy part- moving into your brand new home 🙂
Buying a home is one of life’s most exciting milestones but also one of its most daunting tasks. We hope that this guide has provided some clarity throughout each step of the process so that when it comes time for YOU to buy a home in New Jersey, nothing stands in your way!