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How Long Does It Take to Buy a House?

Preparing to Buy a House

Check Your Credit

  • You generally need a credit score of 620 or higher to get approved for a mortgage.
  • If you want a lower interest rate, you’ll likely want a score in the upper 700s.
  • Check your credit score to get an idea of what to expect in terms of approval odds and loan terms.
  • A good credit score can help you qualify for better mortgage rates and terms.
  • You can check your credit score for free on various websites or through your credit card issuer.

Get Your Finances in Order

  • Lenders typically require a down payment of as little as 3%.
  • You may need to show additional cash reserves on your down payment.
  • Look at your savings balance and determine whether you have enough to buy your desired home.
  • Consider saving for closing costs, ranging from 2% to 5% of the purchase price.
  • You’ll also need to factor in ongoing expenses like mortgage payments, property taxes, and insurance.

Determine the Monthly Payment You Can Afford

  • Once you know how much you can afford to put down on a home, look at your budget to gauge how much you can spend on a monthly mortgage payment.
  • Look at average mortgage rates and use a mortgage calculator to estimate the affordability of different loan amounts.
  • Consider your income, debt, and credit score when determining how much house you can afford.
  • Aim to spend no more than 30% of your gross income on housing costs.

Finding the Right Team

Find a Real Estate Agent

  • A real estate agent isn’t required to buy a house, but working with a professional who knows the local market and has experience negotiating with sellers can make the process much easier.
  • To find a good agent, ask friends and family members for recommendations.
  • Interview each agent to understand their personality, experience, knowledge, and approach to helping you buy a home.
  • Look for an agent who is familiar with the local market and has experience working with buyers.

Choose a Mortgage Lender

  • Consider interest rates and estimated closing costs when choosing a lender.
  • Getting pre-approved before beginning your home search is beneficial for several reasons.
  • Preapproval can take 1 – 5 days.
  • You can also consider working with a mortgage broker who can shop around for the best rates and terms.

The Home Buying Process

House Hunting

  • Before you house hunting, consider your desired location and the number of bedrooms and bathrooms you need.
  • Finding the right property takes up the most time in the home-buying process.
  • Clearly defining your needs and knowing what to look for in a house ahead of time can help expedite your timeline.
  • When evaluating potential homes, consider factors like commute time, schools, and local amenities.

Making an Offer

  • Once you find a house you want to buy, work with your real estate agent to make an offer on the home.
  • Your agent will run a comparative market analysis at this stage to determine a fair purchase price.
  • The seller typically responds to offers within three days.
  • Be prepared to negotiate, and consider including contingencies in your offer to protect yourself.

Due Diligence

Home Inspection

  • While an appraisal estimates the home’s value, a home inspection is an in-depth visual examination of the property.
  • Inspections can uncover red flags.
  • You may need to negotiate with the seller if the inspector discovers any issues.
  • Consider hiring a professional home inspector to evaluate the property.

The Appraisal

  • An appraisal is a professional opinion of how much your home is worth.
  • Mortgage companies typically require an appraisal before you can get a loan.
  • Appraisals ensure you’re not paying more than your home is worth.
  • The appraisal process typically takes a few days to a week.

Buy a House

Finalising the Mortgage Loan

Underwriting

  • During the underwriting process, your lender verifies your income, assets, and debt to ensure that you qualify for a loan.
  • During underwriting, your lender will check your credit report and review your asset statements, appraisal, and income documentation.
  • You may need to provide documentation promptly if requested to ensure your loan moves smoothly.
  • The underwriting process can take several days to a few weeks.

Closing on the Loan

  • During closing, a title company will complete a title search and property survey to ensure the property has no other claims.
  • You’ll purchase homeowners insurance, and your lender will draft a Closing Disclosure.
  • The Closing Disclosure outlines the final terms of your loan.
  • Review the disclosure carefully and ask questions if you’re unsure about anything.

Tips for a Smooth Home Buying Experience

Plan Ahead

  • Start the home-buying process early to avoid delays.
  • Consider getting pre-approved for a mortgage before starting your home search.
  • Research the local market and understand the current conditions.
  • Be prepared to act quickly when you find the right home.

Be Flexible

  • Be open to different types of homes and neighbourhoods.
  • When evaluating potential homes, consider factors like commute time, schools, and local amenities.
  • Be prepared to negotiate, and consider including contingencies in your offer to protect yourself.
  • Stay organised and keep track of deadlines and paperwork.

Common Questions About Buying a House

How Long Does It Take to Buy a House?

  • The home-buying process can take anywhere from a few weeks to several months.
  • The average time to buy a house is around 50 days, which can vary depending on the local market and other factors.
  • Consider getting pre-approved for a mortgage and working with a real estate agent to expedite the process.

What’s the Role of a Real Estate Agent in the Home Buying Process?

  • A real estate agent can help you navigate home buying and provide valuable guidance and advice.
  • They can help you find the right home, negotiate the price, and handle paperwork and logistics.
  • Consider working with a real estate agent who is familiar with the local market and has experience working with buyers.

How Can I Get the Best Mortgage Loan for My Needs?

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