The Getting Started Manual For First Time Home Buyers

Are you thinking about buying your first home but completely overwhelmed with where to even begin?

Buying your first home is a big, and exciting, decision. It’s also one that comes with a big learning curve you need to get down quickly.

There are many steps to the process and even though your agent is always here to help you and give advice it’s critical you do your own research. You want to be able to take action quickly when you find your dream home. To do this you will need to be able to keep up with the process by having everything done neatly, orderly and on time.

So where to start?

Start here:

Start by sitting down with your budget. What do your current finances look like? What sort of wiggle room for spending do you have? What can you afford for a monthly mortgage payment?

And perhaps more importantly, do you have enough saved to cover a down payment and closing costs? Depending on which programs you qualify for you don’t necessarily have to put the traditional 20% down. With that said, you should know how much you would need to put down and if you have money in the bank to cover those costs.

Smooth out any credit snags. Your credit score doesn’t need to be out of this world, but it should reflect that you are actively improving and financially responsible.

Find a mortgage professional you trust to help you make the right moves throughout the process. Again, you want to be able to take action quickly once you find a home you love. And you don’t want to miss out because your mortgage professional hasn’t prioritized you.

You will also want to have a preapproval prepared, with the help of your mortgage professional, when you are ready to start looking at houses. Having a pre-approval in hand shows your agent that you are serious about this process.

Calculate the costs. Yes, more math! You will want to take into consideration real estate taxes, HOA fees, home repairs and maintenance as you refine your budget to see which homes make the most sense for your lifestyle.

When looking at homes focus on the “bones” of the house. Look past paint, hideous wallpaper and yes even the granite countertops. Are there enough bedrooms? Bathrooms? A laundry room? Is there enough garage space and driveway? Do you like the floor plan? The neighborhood?

Know what’s important to you. In an ideal world, you will find a home that ticks off every item on your wishlist. And not to say that it’s entirely impossible, but know which items on your list are negotiable. Which are you willing to budge on and which are make or break?

Helpful Hints for First Time Buyers

OrganizedWhether you buy your first home later in life, or directly from college, buying your first home is a major milestone in your life.  For that reason, there are things you need to be knowledgeable about before your purchase is complete. You will want to safeguard yourself so you know that you are getting a home and a loan that you can afford. Here are a few tips from mortgage and real estate pros to help prepare you for the biggest purchase of your life.

Using an Agent

If you are a buyer, then there is no reason not to use a real estate professional. It does not cost you any more money to hire an agent. That agent will do more than find you that perfect house. You will discover that after you find a house is when you will need that agent the most.  The agent will use their expertise to present your offer to the seller and then address issues that may arise between contract and closing.

House Hunting

Remember, location, location, location. This is very important when buying a house.  Location plays a big part in determining the market value of the home. Before you start the house hunting process, make sure you know what neighborhood is a good location for you. Also, it would be good to have an idea of what style home you are looking for. Real estate moves quickly, so if you see a property that you love, you should move on it before someone else does.

Find a Loan that Works for Your

It sure can be tricky business trying decide what kind of loan is right for you.  There are many different types of loans that you should be aware of.  There is an Adjustable rate mortgage which has an interest rate that is linked to an economic index. So as the index changes your interest rate and payments may go up or down. There is also a 30 Year Fixed Rate Mortgage as well as a 15-Year Fixed Rate Mortgage. Some state and county maximum loan amount restrictions may apply.

Home Buyer Alternatives for First Timer

Saving for a first home can sometime seem like it’s a hill that too steep, but don’t worry there are assistance programs that can help. The Federal Housing Administration offers loans to people with a credit score as low as 640, low down payments and down payment assistance. There are also VA and USDA loans: Certain active members of the military and veterans as well as qualifying residents of designated rural areas can qualify for a 0% down-payment housing loans that are free of mortgage insurance fees.

How Much Do You Have to Put Down?

It really depends on what type of loan you have. If you have a conventional loan then you may have to put as much as 20% down. It is possible to put 5% down on a conventional loan if you don’t mind paying mortgage insurance.  If you go with the FHA loan you will need at least 3.5 % down.  For people who are relying on others to help with down payments, an FHA loan may be a good option. First time home buyers need to look around and know that there are a multitude of down payment assistance offers by state or local governments.

Closing cost:

There can be a lot of hidden fees in closing costs; first time home buyers should be aware of these costs.  These fees are typically included in the closing costs, including fees for commissions, appraisals, inspections, certifications and surveying.  There will also be fees for government record changes, tax and title services and transfer taxes.