Buying a house in Pennsylvania is an exciting time! It’s a beautiful city that’s rich in history, and well known for its beautiful architecture. However, all that’s drawing you to Pennsylvania doesn’t negate the stress of purchasing a home. Whether you’re a first-time home buyer in Pennsylvania or have owned several homes in the past, there’s a lot to consider when changing your address. It doesn’t have to be totally overwhelming though! Learning the ins and outs of the home buying process in Pennsylvania will help make the journey easier. Our guide to buying a home in Pennsylvania will lay out everything you need to know, so you will feel prepared and confident when you enter the market. So, what are the steps to buy a house in Pennsylvania?
Set a Budget
Before you start scouring real estate apps for your dream home, it’s important to set a budget that works for you. Median sale price for a Pennsylvania home is $284,900, but keep in mind that your budget doesn’t just apply to the general price of the house. You will need to consider closing costs, interest rates, how much cash you are able to part with for a downpayment, utility costs and Pennsylvania property taxes. You should also make sure that you will have some rainy day money for upgrades or unexpected repairs once you move in. Keep in mind the general rule of thumb is that about 38% of your monthly earnings should go to loan repayment (not just your mortgage!). Pennsylvania property taxes are high.
Get Pre-Approved for a Mortgage
Once you’ve determined your budget, the next step is to get pre-approved for a mortgage in Pennsylvania. This will confirm what lenders are willing to give you based on your credit score, employment history, and even veteran status if you have served in the military. It’s best to do this before working with a real estate agent so that there are no surprises once you start looking. It’s also a time saver, and more appealing to sellers – it shows you’re ready to go! Take some time to shop for lenders and apply with several.
Find a Real Estate Agent
There are tons of real estate apps out there, but they are no substitute for a great real estate agent! Real estate agents often have inside leads on homes before they hit the market. It’s a good idea to speak to several agents as you begin the process, so you can find one you’re truly comfortable working with. It’s a big decision, so you will want to find someone who listens to your wants and needs, takes the time to answer your questions, and doesn’t try to upsell you. If you’ve already chosen a Pennsylvania real estate agent but haven’t been pre-approved yet, that’s no problem! Real estate agents in Pennsylvania often have relationships with trusted lenders and can steer you in the right direction.
Start House Hunting
Once you’ve had detailed conversations with your real estate agent about what you’re looking for, it’s time to get out there and start looking! Touring Pennsylvania homes is one of the more fun parts of the home buying experience. As you go through house hunting in Pennsylvania, it’s important to remember that it’s almost impossible to find a home that has everything on your wishlist. Think about what you’re willing to give up versus what is non-negotiable, and listen to your gut.
Make an Offer
You’ve found your Pennsylvania dream home! Now what? When you buy a house in Pennsylvania, the next step is to put together a competitive offer. Talk to your real estate agent about what they feel should be included in your offer to increase the chances of yours being selected. Once you’ve come up with a plan you’re comfortable with, how do you buy a house in Pennsylvania? Your agent will draw up the necessary documents and submit them once you’ve signed them.
Have the Home Inspected
Congratulations, your offer was approved! You are now “under contract,” but you do not yet own the home. The next step is having the home inspected. Usually your real estate agent will recommend a trusted inspector who will thoroughly check the home for water damage, pest issues, lead paint, foundational cracks, and much more. Due to the rising water table and age of a lot of Pennsylvania homes, mold and basement water issues are common. Once the home is inspected, you will receive an extensive report with recommendations. Then you and your real estate agent will discuss any negotiations you’d like to make with the seller based on the inspections’ findings.
It’s closing day! Everything is in place – your mortgage is drawn up, you and the seller have agreed on and executed repairs or concessions based on the inspection, and it’s time to close on your dream home you bought in Pennsylvania. You will meet at a lawyer’s office to confirm all parties are willing participants, review all the contracts and transfers, and sign, sign, sign! Then you’ll receive all the keys and codes to your new home, and you can move in!
First Time Home Buyers Programs in Pennsylvania
There are several options for first time home buyers seeking assistance in Pennsylvania that are worth looking into. The best part is that you can still be considered a first time home buyer in Pennsylvania even if you have owned a home in the past. Prospective residents who have not owned a home in the past 3 years are considered first time buyers again! Let’s take a look at some of these amazing programs!
Philly First Home
If you’re specifically buying in Philadelphia, Philadelphia’s first time home buyers’ program is definitely worth looking into! Philly First Home offers up to $10,000 in assistance for first time home buyers. This grant goes towards down payment and closing costs, and can make a big difference! You must complete one-on-one counseling through Philadelphia’s homeownership counseling program before signing an agreement of sale to qualify for Philly Home First. If you are purchasing a condo, you are not eligible for Philly First Home – single family homes and duplexes only. Click here to find a list of agencies that can assist you in getting enrolled in this program!
Philadelphia Housing Development Corporation
Hours: Monday – Friday 9:00am – 5:00pm
Address: 1234 Market St., 17th Floor, Philadelphia, PA 19107
PA Housing Finance Agency
The PA Housing Finance Agency (PHFA) offers a number of assistance programs for home buyers! Qualified participants can apply for:
- PHFA Grant: $500 assistance
- Keystone Advantage Assistance Loan Program: up to $6000 in assistance
- Keystone Forgivable in Ten Years Loan Program: up to 5% of home purchase price or appraised value
- Mortgage Tax Credit Certificate: 20%-50% tax credit on mortgage interest paid
- Programs for Persons with Disabilities: competitive interest rates
- HOMEstead Downpayment and Closing Cost Assistance Loan: up to $10,000 in assistance
Most of these programs can be combined, so you may qualify to participate in more than one! It’s important to discuss all the terms of these programs with a counselor, as most of the loan programs act as second mortgages with high interest rates.
Pennsylvania Housing Finance Agency
Hours: Monday – Friday 8:00am – 5:00pm
Address: 211 N Front St, Harrisburg, PA 17101
Telephone: (855) 827-3466
First Front Door
The Philadelphia Federal Credit Union has teamed up with FHLBank of Pittsburgh to offer up to $5000 cash to help with closing costs and down payments. In order to qualify, you must be a first time home buyer and:
- Obtaining a conventional mortgage
- Contributing personal funds into your closing costs and downpayment
- Have a household income that is at or below 80% of area median income
- Complete homeownership counseling
- Work 30+ hours a week if you are a student
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