When all is said and done, buying a home is exciting—and a milestone to be celebrated. But if you expect each step of the process to be a thrill ride, we’re here to tell you you’re sorely mistaken. In fact, between the rush of the hunt for the perfect place and the extreme satisfaction of crossing your threshold as a new homeowner, the rest of the home-buying process can be a bit of a slog.
There are many unglamorous parts of buying a home—some of which many consider downright boring. Do the words “financial due diligence” make your eyelids feel heavy? Yeah, ours too.
But when you know what to expect and why, it’s a whole lot easier to deal. So pay attention to these three very mundane—but very important—parts of the home-buying process. We’ve outlined why they matter and how to get through them without losing your sanity.
1. Raising your credit score
Savvy home buyers know that a good credit score will allow them to lock in a good interest rate. But what if your credit score is in the gutter? Raising it can take some time—a year, if not more—but there are some strategies you can take to get it where it needs to be.
One of the easiest and most effective ways to bump up that credit score (besides paying all your bills on time, which you already do anyway, right?) is to avoid applying for any new credit—including personal loans, car loans or leases, and credit cards—for about one year before starting the home-buying process, says Shayan Jalali, an agent with Berkshire Hathaway HomeServices, in Boston.
“Your credit gets pulled each time you apply for a loan of any type, which negatively impacts your credit score,” he says. And that can translate to a less favorable rate when it comes time to get a mortgage.
2. Securing a mortgage pre-approval
Once you’re satisfied with your credit, it’s time to shop for a mortgage lender who will ultimately help you buy a home. We won’t lie: Shopping for a mortgage lender is not fun. It requires a number of steps and a lot of paperwork.
First, you’re going to want to inquire with different lenders to learn about their rates, programs, fees, and specials. You’ll also want to consider if you want to work with a mortgage broker, who will essentially shop home loans for you.
It’s important to take the time to discuss the ins and outs of the loan programs that are available, from conventional 30-year loans to adjustable-rate mortgages, to FHA loans.
Once you’ve settled on where you want your loan to come from, it’s time to get that all-important pre-approval, which is a commitment from your lender to provide you with a home loan up to a certain amount. That will set your home-buying budget, and also show sellers that you are serious about buying when it comes time to put an offer in.
But the pre-approval process takes patience.
“Lenders require a host of documents to get you fully pre-approved, and often it comes down to minutiae such as explanations of small transactions in or out of your account,” says Luke Loiselle, a real estate agent at Keller Williams, in Portland, OR. The plus side is that once you have your pre-approval, you can largely check tedious mortgage tasks off the list.
3. Reading the fine print
Spoiler alert: You are going to be bombarded with financial, legal, and technical documents during the home-buying process—and unfortunately, it’s your job to read through all of it. Even if that sounds about as exciting as trudging through “War and Peace,” don’t skimp on the time it takes to understand the contracts you’re signing.
The best way to get through all the painful paperwork is to know what to expect. Here are the three most important documents that are going to come your way:
- Your offer: Once you and your real estate agent have put together an offer, you have to look over the contract and make sure it’s accurate. In the age of digital signature technology, buyers often click to add their initials or signature without fully reading contract documents. This is especially common for buyers who have made multiple offers, as they all start to blur together. “It’s important to read every document for each offer to ensure that the contracts were completed correctly, including the offer price, earnest money deposit, and any contingencies, says Andi Costello, a real estate agent with Keller Williams Premiere Properties, in Vancouver, WA.
- Inspection report: Soffits. Fascia. Ductwork. We get it, the inspection report can be a snooze. In fact, if the roof isn’t falling off and the sellers are not planning to remove that orange shag carpet, then you may decide you can just ignore the whole thing. But that would be a mistake. “Even if you’ve received a verbal update after the inspection, you should actually read the report you paid for to ensure the inspector didn’t inadvertently forget to share any areas of concern,” Costello says.
- Closing documents: Get ready for a pile of closing documents about 2 inches thick. It’s in your best interest to master all the intricacies of your mortgage and understand your closing fees, so make sure to look over your closing documents and have your lender explain any issues that you’re concerned about so you know what you’re signing.