Updated: Apr 1, 2019
5 Tips For First Time Home Buyers
Owning a home is a goal that most people want to reach at some point in their life. Most will have to take out a mortgage to make this goal/dream come true. That is why it is so important that you start this process on the right foot. Meeting with your lender of choice is the FIRST step you should take when wanting to purchase a new home.
1. FIND THE RIGHT HOME FOR YOU
It is always a good thing to put some thought into what type of home you are interested in purchasing. How big of a home do you need? Are you hoping to live in certain areas or neighborhoods? Do you want to be near shopping and restaurants or do you prefer to be farther out from the city?
Your income is going to determine what you can and cannot afford for a home. Another question you need to ask is what do you feel comfortable or even want to pay for a home? If getting a loan, your monthly note may need to stay within a certain price range. You need to ask yourself "What is important to me in a home?" You will most likely not find a "perfect" home. Realistically, most people will have to make some compromises when searching for a home. Especially if there are two or more people doing the house hunting.
It is recommended that you make a list of the features you desire in a home.... like the number of bedrooms or bathrooms, is there a backyard, garage size for multiple cars. Also, what kind of finishes or materials are you hoping to find in a home? Is granite in the kitchen important, do you want an open concept home or is a two-story home a must?
Thinking about this before you even start your home search can help decrease stress and help you stay in line with what is important for you.
Reach out to your preferred Real Estate Agent to help you with home values in the areas you are interested in looking. An agent is a great resource and a stress-reducing asset to you as you start this process.
2. PUT MONEY ASIDE FOR A DOWN PAYMENT
Nearly all mortgage loans and lenders require some amount of cash as a down payment. The amount you are able to put down can open up different options when deciding on what type of loan will work best for you. It will also let you know how much you can afford to borrow for a home.
Need Assistance with Your Down Payment?
There are many different home buyer assistance programs in the United States that can offer assistance with your down payment, offer grants or low interest loans. There are also services/programs that can also help with your closing costs. Closing costs is something every buyer will have when purchasing a home. These programs can help reduce these costs.
3. TALK TO MORTGAGE LENDERS
One of the number 1 mistakes made by home buyers is NOT talking to a lender before they start searching for a home! Talk to your Real Estate Agent if you don't know where to start. Chances are they can give a list of lenders to reach out to. It will benefit you to know exactly where you stand and what price range you need to stick with BEFORE you start looking at homes.
Talk to multiple lenders and see what different programs and options they can offer you. It can take some time, but you're going to have your mortgage for the next 15-30 years, and is an important part of the process. They can also let you know an estimate up front about what your closing costs will be at closing.
Once you set aside some time to make a few inquiries, tell the truth. Mortgage quotes can vary based on your down payment, credit history, income, assets, and debt. Be honest with your lender when you fill out their forms and applications. It can save you some heartache later on down the road. They are going to verify all of your information anyway, so not being honest will only hurt you in the end.
There will be lots of paperwork and requests for information. It can be overwhelming and stressful at times, but will help you reach your goal of being a home owner!
4. GET YOUR PRE-QUALIFICATION LETTER
At this point, you should have a good idea of what your budget is and what type of home you are looking for. You more than likely have already decided what type of loan you will be getting to purchase a home and what type of down payment you will be making. Your lender has given you your pre-qualification (or pre-approval letter) and you are ready to go!
5. GETTING IN CONTACT WITH YOUR REAL ESTATE AGENT
Now that you have your pre-approval letter in hand, it's time to get with your Real Estate Agent! They are the person that will help you take that next step in finding your dream home! Not only will they answer any questions you have about the buying process, but they will also be able to help you navigate the paperwork that goes with buying a home. Your agent will help keep you on track and on budget and help you narrow down the homes that are right for you. And they will be able to advise you about the market conditions that will help you make an informed decision when you are ready to make an offer. Your real estate agent's main goal is to make the process as stress-free as possible and get you in the home of your dreams for a price that fits your budget! They are working toward the same goal as you! Happy House Hunting!