My Lease is up…, When should I start looking for a house? We get this question all the time. Buying a house isn’t like going to the store a to buy a new shirt. It takes time and planning. And not all of it is in your control.
If you know your credit score and it is at least over 580 your home buying activities should start 3-4 months before your lease terminates. If you have a less than stellar credit score or are unsure of it, start sooner. Your first step is to visit a reputable mortgage lender or broker. Stay away from the online only companies. Let the lender pull your credit score. They actually receive more in-depth information than we do with FreeCreditReport.com. If your credit score falls into the lower than necessary range, a good lender will work with you to take steps to raise it. A lower credit score will cost you more in interest rates, pre-paids, home insurance, and car insurance. A little hint, if you do not have much credit, open up a credit card. You don’t have to use it much. Just make sure it is paid off and by all means, DO NOT CLOSE ANY CREDIT ACCOUNTS! It will lower your score.
Assuming you have a decent credit score, get a pre- approval letter from a bank or mortgage lender. Now your search begins. Given the low inventory of homes on the market in our area, your search could take more than a month or two. Once you find the home that fits your needs, you still need 45-60 days until move in.
The offer needs to be accepted and that can go back and forth a few times. Then as a Buyer, you arrange a home inspection within 14 – 21 days. Depending on the results, that may take a bit of time to come to terms with the Seller. Your lender will be working on the load approval and order an appraisal. The appraisal could take 40-45 days depending on how busy the market is at the time of your offer. Once the appraisal comes in, hopefully at the purchase price, the loan will need another week or so to be finalized. Then the closing may be scheduled.
As a renter, you may have some leeway as to your moving date as when the loan closes you don’t pay the first month’s mortgage. But all of that depends on your lease agreement. Remember to give your landlord enough notice of your moving out.
Bottom line, the home buying process takes 45-60 days and that depends on how quickly you can find a home.