Video Answer Desk. How much house can I afford?
This week, Ralphy in New York is looking for some step-by-step guidance on buying a house. We've also launched a new round of video Answer Desk installments, which will appear every other Thursday for the next few months.
I want to know: what are the steps that I need to follow to buy a house?
-- Ralphy A. Bronx, N.Y.
It’s as easy as 1, 2, 3. And then 4 through 12. But here are - roughly - the steps you'll probably encounter.
Your brother-in-law may have different ideas about the order we've come up with. Your real estate agent or lawyer may add a few steps here or there. Through it all, keep in mind that while there are common milestones in most home sales, there’s no such thing as a “routine” real estate transaction. Each one usually has a few twists or turns – some little and some not so little. The basic steps are designed to protect buyer and seller from surprises that end up sending the deal badly off the rails.
You also need to take responsibility for keeping the process running smoothly. Even though you’re paying
fees to an attorney and a mortgage broker – and the agent is getting a fee from the seller – these folks are working on multiple transactions and things sometime slip through the cracks. As you proceed, ask how long each step should take. You (usually) don’t need to badger these players to keep things moving. But if you haven’t heard back at various stages along your timeline, call and find out how things are going.
We’re also assuming you gotten past the “nibbling” stage – reading the paper, maybe going to an open house or two - and you’re ready to get serious. So treat these as general guidelines.
Step 1: Go shopping for a mortgage. It may seem backwards to shop for a mortgage before you shop for the house, but there are several reasons for doing this. First, you’ll find our how much you can borrow, which has a lot to do with how much house you can buy. Be careful not to let the lender you push you into a monthly payment you don’t feel comfortable with. There are no “rules” here – only you know how much you can comfortably handle. (For more on this, check this week's Video Answer Desk .)