How can I make my offer stronger?

For those who need to sell, becoming a cash buyer is the ultimate way to stand out from the competition.

What is a home sale contingency?

This is a clause in your offer that says the sale of your new home is dependent on the sale of your current one. Most sellers dislike these, as they create uncertainty.

Can I afford a $300k house on a $70k salary?

It’s possible, but it depends on several key factors beyond your income. While a $70,000 salary is a strong start, a lender will look at your debt-to-income ratio, credit score, and how much you have saved for a down payment. If you have minimal debt and can make a substantial down payment, you’ll be in a much better position to qualify for the loan.

Is $2000 a month for a house good?

The term “good” is subjective and depends on your personal financial situation. Financial experts often suggest that your monthly housing costs, including principal, interest, property taxes, and homeowners’ insurance, should not exceed 28-36% of your gross monthly income. For a $2,000 monthly payment, your income would ideally be around $6,000 to $7,000 per month, or $72,000 to $84,000 annually.

What is the most important step for a first-time homebuyer?

While all steps in the process are crucial, the most impactful step for first-time homebuyers is getting preapproved for a mortgage. This tells you exactly how much you can afford, which prevents you from looking at homes outside of your budget. A pre-approval letter also shows sellers that you are a serious buyer, which can give you a significant advantage, especially in a competitive market.

How can I save money during the home-buying process?

There are several ways to lower your overall costs. Saving a larger down payment can help you avoid paying private mortgage insurance (PMI) and secure a better interest rate. You can also shop around and compare offers from different mortgage brokers to find the best terms. Additionally, being prepared with all your financial documents can help expedite the closing process and potentially save you from unexpected costs.

How to Buy a House: 7 Proven Steps to Secure Your First Home

Buying a house is one of the most exciting milestones in life. It’s also one of the most complex. For many, the dream of a new home comes with a significant challenge: How to buy a house while simultaneously selling your old one.

Thankfully, buying a home doesn’t have to be overwhelming. This guide breaks down the process step by step, from financial planning to closing. We’ll also share expert advice for homeowners who need to sell before they buy.

The Home Buying Process: A Step-by-Step Guide

The journey to your dream home is a lot smoother when you know what to expect. Here’s a breakdown of the typical steps.

Strengthen Your Financial Readiness

Before you even start house hunting, you must get a clear picture of your current financial situation. This means you have to review your income, debts, and savings. A strong credit score is vital, as it can help you qualify for a better mortgage loan interest rate. It also leads to lower monthly payments. Most lenders will also look at your debt-to-income ratio to determine how much home you can afford, according to Bankrate.

Save for a Down Payment and Closing Costs

Saving for a down payment is one of the most critical steps, as recommended by the Federal Reserve Bank of St. Louis. While some conventional loans require as little as 3% down, aiming for 20% can help you avoid private mortgage insurance (PMI) and lower your monthly payment. Don’t forget to budget for closing costs, which are typically 2-5% of the purchase price and cover fees for your lender, title company, and more.

Secure Your Mortgage Pre-approval

This is a non-negotiable step. Getting a pre-approval letter from a mortgage lender is an official statement of how much you can borrow, based on a review of your finances, including tax returns and pay stubs. This letter gives you a realistic budget and, more importantly, can strengthen your negotiation position when making an offer on a home.

Find the Right Real Estate Agent

A great real estate agent is your guide and advocate throughout the home-buying process. They have deep knowledge of the local market and can help you find homes that match your criteria, negotiate offers, and navigate the complex legal and financial paperwork.

Begin Your Home Search and Make an Offer

Now for the fun part! Work with your agent to begin searching for your dream home. Once you find “the one,” your agent will help you craft a competitive offer letter. This includes the proposed price, the closing date, and crucial contingencies like a home inspection or financing.

Navigate Escrow, Appraisal, and Home Inspection

Once your offer is accepted, you enter escrow. During this period, the home appraisal takes place, an independent assessment ordered by the lender to ensure the home’s value is sufficient to secure the loan. You’ll also complete your home inspection to uncover any hidden issues. This is a critical step to ensure you’re making a sound home purchase.

Seal the Deal: Final Walkthrough & Closing

Just before the closing meeting, you’ll do a final walkthrough to confirm the property is in the agreed-upon condition. On closing day, you’ll sign the final documents, review the closing disclosure, and get the keys!

The #1 Challenge: Buying a New Home When You Need to Sell Your Current One

For many buyers, the biggest hurdle is a logistical nightmare. You need the equity from your current home to fund the down payment on your next one, but you can’t make a strong offer until your old home sells. This creates a stressful “Catch-22” situation.

Here are the two primary reasons it’s a problem:

If you make an offer that’s contingent on the sale of your old house, it is a red flag to sellers. Your offer can be easily rejected, even if it’s the highest one.
You could end up with a huge mortgage on your new home and a previous home that won’t sell, or you could sell your home first and be homeless for a while.

The traditional solutions, like an expensive bridge loan or moving into a rental, are often costly, inconvenient, or both.

The Modern Solution: Become a Cash Buyer

With this solution, you can find your dream home and make a cash offer without a home sale contingency. It’s the most powerful position a buyer can be in. To do this, you need to sell your current house for cash first.

At iBuyHomes, we can give you a free, no-obligation cash offer for your current house. If you accept, you get a firm closing date and unlock your equity in a timely manner. This gives you the funds you need to make a strong, non-contingent offer on your next home. You avoid the stress of juggling two mortgages and can act fast when the right home comes on the market.

Are you ready to find your next home? The first step is to secure your financing. Unlock the equity in your current home and become a powerful cash buyer. Get a free, no-obligation cash offer from iBuyHomes in different cities, including Harrisburg, Orlando, and Tacoma.