Buying a house for the first time is intimidating… but it doesn’t have to be. Knowledge is key, and with a thorough understanding of the process you can put your mind at ease and feel comfortable with the decision you’re making.
Buying a home can be expensive! Save for the unexpected (and also the expected – i.e. down payment.) Some
things don’t necessarily need to be saved for – there are down payment assistance programs. Talk with your lender!
- How much home can you afford?
Be realistic in what you are comfortable paying each month for housing expenses. If you are movie from a rental situation this can mean not only adding a mortgage but also water, sewer, garbage, home insurance and in some cases utilities if that is currently included in your rent. A lender will help narrow down your debt-to-income, but it isn’t always best to go for the most expensive you can afford.
- Clean up your credit
Stop opening new credit lines! Wait to buy a car, max out your cards or open a new loan until you have closed on your home. Anything that has credit tied to it can affect your credit score. This also means if you have items in collections from 4 years ago.. talk to your lender before making any changes to what you already regularly do. Often times they can help you improve your credit!
- Explore lending options
There are different types of loans—USDA, FHA, conventional, VA and more. Your lender specializes in this area. Talk to him or her about your options! Some loans may be cheaper than others in the long run, they can explain all of this to you when you meet up.
- What are your wants
When buying a home most of us want a HGTV-move-in-ready home, but that isn’t always realistic. Figure out what is merely an added “bonus” in a home.
- What are your needs
Your needs are different than your wants. These are the basic qualifications for you buying the home. Many peoples needs include bedrooms, bathrooms, yard size, etc. These are things you typically can’t just change (like paint color, appliances, etc.)
- Get preapproved!
Getting prequalified or preapproved is the first major step. This is when a lender tells you what your financial limitations are. Usually this is an “up to” amount. They can also provide you with an estimated monthly mortgage payment – this isn’t also exact, as it often includes estimated taxes.
- Find an agent
Sometimes this is the first step buyers take when finding a house, but in case it wasn’t. Research! Look at their website, their sales numbers, experience in the area and ask them questions. You should use an agent you are comfortable with; don’t settle!
- Research neighborhoods
This is especially important if you are moving to an area you are unfamiliar with. You can check crime rates on local sheriff websites, talk to neighbors or friends/relatives that know the area.
- Be realistic
No house is going to be perfect unless it’s built from the ground up, and even then it doesn’t always turn out exactly as someone wants. Just keep in mind that wants and needs are different!
This isn’t so much something that you need to worry about because your agent will help walk you through the process—another reason you should feel comfortable with your agent. You want someone who has your back!
- Research home owner’s insurance
This is something that your lender can typically advise you on. You can shop around a lot like you would for car insurance but for your house!
- Get a home inspection
Home inspections aren’t always required, but they are a very good idea. Getting an inspection can give you a heads up on what needs attention immediately – like a new roof or foundation issues, and it can let you know what will need to be addressed in the future.
- Communicate with your lender & agent
Communication is key when it comes to buying your new home. Everyone needs to know what is going on at all times to ensure a smooth closing. This is especially important for the lending side! It allows the mortgage broker/lender to get out in front of issues before they become a problem.
- Get the keys!
This one’s self-explanatory 😊 You are officially a home owner!
This is not legal or financial advice. For further information contact a specialist.