Thinking About Buying Your First Home?
Ready to take the leap into home ownership? We’ve got you covered! Shopping for a home can be overwhelming, especially when it’s your first. Sticking to these tips while you navigate through the process can guarantee you buy the perfect home at the right price!
Where to Begin
The first step to buying a home is to speak with a lender and discuss which loan is the right one for you. They will thoroughly examine finances, credit history, DTI (Debt-to-Income Ratio), employment history, etc. It is important to start by evaluating and building your credit since this determines your approval, interest rate, loan terms, and loan amount. Have bad credit or a high debt-to-income ratio? Look for opportunities to build your credit score and lower your DTI, such as paying off any outstanding debts and paying statements on time.
Based on which loan you qualify for, they may suggest a down payment. Rule of thumb is the sooner you start saving, the better, so you can present the down payment your lender requires. Once you speak with your lender and have made all the necessary steps to be pre-approved, they will give you the loan amount in writing. With this in hand, you will be ahead of many other buyers that have not taken this step.
Choosing the Right Realtor
During the home buying process, you will spend most of your time with your real estate agent, so it’s important that you find someone you are comfortable speaking freely to. You should want an agent that is knowledgeable about the market and is great at negotiating. Referrals are one of the best ways to find a highly skilled realtor. Check out online reviews, ask other homeowners, or meet agents at Open Houses to get a feel for how they work. You can also interview multiple agents to decide which one is right for you.
Finding the Perfect Home for You
Of course, you want your first home to check off every box on your wish list, but thinking about how much home you can afford helps set proper expectations. Consider making two lists: “Must Have” and “Would Like to Have”. This will help you examine your necessities of a home in your price range.
While touring properties, observing the community is just as important as looking at floorplans, features, and finishes. Too many times home buyers will love a home that is in the wrong neighborhood for them. Be sure to research local safety statistics, HOA fees, commute time, etc.
Do not rush to find a home unless you are on a strict timeline. It is easy to become overwhelmed in the home buying process, so take your time to look at houses as they come on the market until you find the one for you.
My offer was accepted. Now what?
Once you enter a contract with a seller, all inspections you would like to do must be done during the inspection period. All inspections you choose to do are at your cost, and many home buyers skip inspections to save money not knowing just how beneficial they really are. Your realtor will be able to help you with resources and education on local inspectors and what inspections to consider.
One of the last key elements to being approved for a loan is the appraisal. This is a professional evaluation of the property that is for sale. It is required by a lender to protect their investment but is also important as a buyer to secure the best price possible.
Made it this far? Congratulations! You are SO close to owning your first home. While you’re waiting for a final closing date to be scheduled, be sure to stay in touch with your lender and realtor in case any issues arise so they can be resolved immediately.
Once all paperwork is signed at the final closing, you are OFFICIALLY a homeowner! Through the countless meetings, talks of finances, and walking through more homes than you can count, you can finally sit back, relax, and enjoy the comfort of living in your own home… until you decide to sell!