As a first-time home buyer it’s of utmost importance that you are properly informed and knowledgeable so that no one can take advantage of you’re not knowing. I am especially thankful that you have come to me for guidance during this uncertain time.
As a real estate agent, I work hand in hand with people who have not bought a house before but also those who haven’t bought one in a while and there are a few things I found they needed a little extra support with. This led me to share my 5 Best Tips For First Time Home Buyers plus one bonus that will help you easily implement them.
For your convenience, I will list them here then go into more detail below. You can click on the link to be forwarded to the exact location on the page should you want to read one more than the others. I’ve also included a YouTube video where I speak on the same topic.
You will have to read to the end of this post to find out what my bonus tip is but it’s a good one! 🙂
If you have any questions or need to find out some sort of information, you can click the button below to get in touch. So without further delay, let’s get into more detail about what you need to know before you begin the search for your slice of the green Earth.
Whether you have a job that pays a W-2 or run your own business that is paid with a 1099 or other forms of payment, you will need to have your finances in order. Keep an account of how much money is coming in and also money that is being paid out. Some examples are:
business expenses (if you run your own business)
personal account statements
Have a record that goes at least 2 years back, especially if you are a business owner. I know this from experience as my husband and I ran into this issue personally as we run our own lawn care service.
Different mortgage loans will have different requirements but I’m the type of person that likes to be the most prepared. That way, you will already be organized should something unexpected come up. Have something digital that holds onto your files for you and keeping track of your finances on a platform like QuickBooks does miracles in this area.
When you’re ready to get everything it’s a matter of pulling the right dates, printing documents, and putting them neatly in a file. Trust me. It might be a little extra work upfront but in the long run, it makes everything go a lot smoother.
Interview 2-3 mortgage bankers/brokers
Chances are, if you’re not buying in cash, you will likely need to get some type of mortgage. There are several types of mortgages that are offered. Some examples are:
VA (veterans only)
Much like the loan and requirements vary, the lender and their policies, procedures and knowledge/skill will vary as well. My recommendation is not to settle for the first banker or broker you speak with.
Interview 2 – 3 different mortgage banker/brokers so that you can find the best package and also someone who you feel comfortable working with. You will also be better informed about your options if you ask the right questions.
Never be afraid to ask questions and don’t be afraid to keep asking the same question even to the same person on different occasions. I can’t tell you how much I’ve learned simply by asking multiple sources the same questions. This is not to say that someone is more or less smart, on your side or anything of that nature.
People have different experiences, experience different moods on different days, and face it, some people take more pride in their work than others. If after the third one you still haven’t found someone you like keep interviewing. This is one of the biggest investments in your life. Take ownership of creating the best experience for yourself.
Get info about Downpayment & Closing Assistance
If you watched the video already you’ll know that before I became a real estate agent, I lacked an understanding of the added expenses of buying and selling a home like:
Fees like these would have definitely blindsided me and I don’t want you to be taken by surprise by them either. While you are speaking with your lender, talk to them about down payment and closing cost assistance programs. Also, be sure to get a clear understanding of all the costs you will be paying.
A good real estate agent will be able to help you as well. I know this is a lot of information at once so should you need any assistance with questions please feel free to get in touch with me through my contact form
Buying a home is exciting right!? Sometimes with exciting things, our minds can go a little crazy with all the ideas, potential, what-ifs, and more! Well…at least mine does, haha! 🙂
I want you to slow down and think about the things you really need in a house compared to things that might not be as important or necessary. For instance, as I mentioned in the video, do you really need 5 bedrooms if its just you, your significant other and your dog. Or maybe you do need 5 rooms if you have multiple kids, a home-based business and like to have family visiting who aren’t from the area you live in.
We’re talking about this next but once you get your pre-approval you will have a better understanding of what you can afford. The number will be able to guide you in what you can really get for the amount you can afford.
Pre-approval is not a guarantee
First of all, let me clear the elephant in the room. There is a big difference between a pre-approval and a pre-authorization. In my mind, the pre-authorization would be the important one but it’s not!
In order to begin a meaningful home search that doesn’t waste you, your Realtor® and everyone else involved’s time, you will need to get a pre-approval. This is a brief assessment of your financial portfolio, credit score and different things that determine the amount of money your lender will allow you to borrow.
The thing is that even with a pre-approval, at the end of the day it isn’t the mortgage and doesn’t necessarily guarantee that you will get the amount it quotes. There are a number of factors that affect the bottom line. One of the biggest things I will stress is during the entire home buying process, do NOT open up any new credit lines. This will greatly impact your credit score which ultimately changes the amount you can borrow.
There are other things that affect the amount your lender will loan you like the house appraisal and which mortgage loan you choose to go with. So think of your pre-approval as a good signal instead of a guaranteed amount of what you will get.
Bonus Pro Tip for The First Time Home Buyer
As promised, I have a pro tip for you that will make all this easier. That is to get a GOOD real estate agent.
A good agent/broker will have contacts to other good sources such as mortgage lenders, attornies, and other entities you will need throughout your home buying process. S/He will also be able to hold your hand through every step you need to take so that things don’t creep up on you and catch you at the last moment or even cause you extra fees. And in real estate, fees are never cheap!
So how can you find a good real estate agent? Ask around. Find people who have bought or sold houses in the past year or two and ask them who they used and what their experience was. If you want to work with me feel free to contact me through my contact page.
I hope this information has helped you get a clearer understanding of some things that you need to know before and during your home buying process. I did not want to make it too overwhelming for you so if you have any questions, comments, or any other need at all please feel free to contact me by clicking the button below. I will be more than happy to help you no matter what part of the country or world you are in.