If you have never purchased a home before the whole process may feel like a big mystery.
It’s something most people don’t do more than a few times in their lives and it’s the biggest purchase that you’ll likely make in your life. Well, good news! It’s not as complicated as you may think!
6-12 months from your purchase…
To answer the question “How long does it take to buy a house?” though – the answer is “it depends”! Don’t you love that? It makes me think about when I was a kid and wanted something – “Mom! Can we…?” “It depends…”. Ugh.
Well, one of the most important first steps is getting ready financially. If you have a good credit score (700+) you’ll likely not have a problem getting a mortgage. Many people have some work to do here first though. That means that you need to find out what your FICO score is (you are entitled to a free credit report annually at AnnualCreditReport.com). When you see your report there may be things on it that you want to dispute because you’ve paid them. You can also see what debts you owe – the goal is to get your debt to income ratio low. Lenders want the sum of your payments to creditors to be under 43% of your income for TOTAL payments – including your mortgage!
You’ll also want to make sure you have money for a down payment (minimum of 3.5% of the purchase price) and potential closing costs (2.5 – 3% of the purchase price) as well as cash on hand for things like home inspections and any deposits you may need for services, plus moving expenses.
If you need assistance in finding a loan officer that can help you find the best mortgage for you, ask a realtor! We work with them ALL THE TIME and typically know who is reliable, provides good service and has a nice array of loan products that they can offer you.
If you are a cash buyer, your timeline will include inspection and title search, but you can close FAR more quickly.
3 months from your purchase…
OK – that’s the hard part over! NOW you can start looking for a home. Because you have your finances in order, you know what you can afford. And your agent will know what you can afford as well! While it is a lot of fun to look at homes that are super fancy, if you can’t buy them… it’s a waste of time.
Finding the right home can be really fast or not as much. Some of that depends on you, and some is dependent on the market. As I type this, in Minneapolis, it is 110% a sellers market for anything under $350K. Homes are going quick, and inventory is low, so you may be outbid if you find one or there simply may not be a home available that meets your needs. However – you’ve done your homework, you have financing lined up and a down payment ready so when you find something you can submit a strong offer and push yourself to the top of the pile!
6-8 weeks from move in …
You find a home that you LOVE! You submit an offer that is attractive to the seller and you are prepared to close with! They ACCEPT!!
You will submit your earnest money (I have a video on that on my YouTube channel!) Typically, in Minnesota, that starts the clock on the inspection period. Frequently this is 10 days in which you have the opportunity to have a home inspector look at the house and give you an idea of what you are actually buying and if there are “material facts” that would inhibit your “quiet enjoyment” of the home. In other words – is there anything alarming that should be fixed before you can safely & comfortably inhabit the home?
Inspectors find things. If the items they find are things that you are willing to fix yourself, then ok. Or you can request the sellers fix it or rebate some of the purchase price so that it can be fixed in the future at no cost to you. If you cannot come to an agreement you can cancel the contract but you’ll be back to the house search stage … I need a flow chart in here. 🙂
30-45 days from move in …
Most lenders can get your loan underwritten and ready within 30 days. During this same time, a title search will be conducted and the sellers will complete any repairs agreed upon. If you have an FHA loan it can take an extra couple of days.
So! How long does it take to close on a home? It can be as little as a week or two for a cash buyer or as much as a year if you need to get your financial house in order. It’s all dependent on preparation on your part and being ready to make a clean offer.
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