Considering buying your first home? Even if you feel you are ready it can be daunting to know where to begin. The first step for a first time home buyer is to determine how will you pay it. Unless you are paying cash you will want a mortgage. It is essential that you prepare and we can offer tips to assist first time home buyers.
Save for buying
Nerd Wallet advises that first time home buyers will want to start saving money. While you do not need 20% down to purchase a home, you will need money for inspections, closing costs, a down payment, move in costs, and one time costs to utilities, insurances, etc.
Many people can or negotiate with the seller to assist with some of your closing costs. Depending on your mortgage program, your down payment may be zero.
Polish your credit
Your credit score will determine your monthly payment. The higher the credit score, the lower interest rates. Free copies of your credit report from all three credit bureaus is available annually. Annualcreditreport.com is the correct site to use. Any other sites will charge you for the free report.
It is advised by mortgage lenders for first time home buyers to pay your bills on time and keep credit card balances as low as possible. Bankers recommend that you keep the credit cards open. And especially you will want to avoid opening new credit during this time when purchasing a new home.
Mortgages
Mortgage programs include conventional, FHA, VA, USDA, and Rural Development. Each has specific parameters for qualification. Your mortgage lender is an expert finding the best program for you for buying your first home.
You will want to consider the length of a fixed rate mortgage (15, 20 or 30 years) or an adjustable mortgage (ARM). These are things a mortgage lender will discuss with you.
Maybe there are first home buyer assistance programs available to you. There are possible programs for down payment assistance, and special programs for people who work as service providers. Ask your lender.
Preapproval
Once you have explored various mortgage programs and have an idea of what you can afford to buy, your lender will provide a letter stating you are qualified and preapproved to buy your first home. Their preapproval is based on your income, employment, debts, banking information, etc. That preapproval letter will accompany your offer when you find the home you would like to buy.
Choose a real estate agent
Real estate professionals work for you. A real estate agent will search for homes on the multiple listing service and homes coming soon, and will have power to negotiate on your behalf for your new home. Check out their testimonials. It matters that you choose an experienced professional, especially for first time home buyers.
Find your first home
You may have a pretty good idea of what you would like to find for your first home. Any maybe you are not sure. An existing home typically costs less to buy than a new construction. Is a condo right for you? Would you like a manufactured home? Or paying cash or if your loan allows, are you looking for a fixer upper? Think about whether you want to live here a short time or long term.
We will schedule homes to tour that meet your search criteria. It will help when we are touring homes to narrow down your pros and cons, take notes and pictures of homes you visit. Then when you find one that will check off most of your list, we will make an offer.
In a competitive market, we can assist to make your offer stand out. We caution first time home buyers not to get caught up in the bidding wars and to stick to the budget. It’s tough out there right now so please have patience and don’t give up. We’ll find your home.
Inspection
Once you have an accepted offer, you will want to schedule an inspection within a short timeframe. We will recommend a few professional home inspectors that we trust. The inspector will crawl all over everything and generally inspect throughout the home. If something is discovered that you do not like, your offer can be withdrawn or negotiations can begin with the seller. We will help with this. Once inspections are complete we are on to closing.
Hooray!
Closing is the exciting part! You actually get to buy your first home. There will be many forms to read, complete and sign at the closing table and then you are officially a home owner!
Marilyn Tucker
