How to Buy Your First Home
Tired of renting? If you are one of those people who is longing for the freedom and security of home ownership, then you have come to the right place. This article will give you some important pointers to help you buy your first home.
Know where to go. Before anything else, you should decide where you will live for the next half of your lifetime. Buying a home is a long-term commitment; so you must choose a location where you can envision yourself in the future, but do not start searching for your perfect home just yet.
Assess your financial status. Try using affordability calculators generally found on financing and real estate websites. Obtain a copy of your credit report and look for errors to be corrected. Compute your debt-to-income ratio, and look into your savings. By now, you can decide the amount that you can spend on a monthly mortgage payment.
Improve your paying capacity. Raise your credit score to get approved on lower interest rates. Start by paying off your credit cards and other debts, especially the ones with the highest rates. If your goal is to buy a house within the next 2 years, avoid making big purchases and refrain from opening new credit with anyone. Create a separate savings account for your home buying fund. Better yet, look for additional sources of income to add cash to your down payment and closing costs.
Explore your options. Housing programs may vary from state to state. Research local housing loans and see if you can qualify for down payment assistance. A wide range of housing loans are available for veterans, low-income individuals, Native Americans, and first-time homebuyers. For more information on specific programs that can help you, see my article – Where To Look For Help With Your Down Payment
Find a local agent. A local real estate agent is someone who lives/ has lived in the area where you are planning to buy a home. He/ She knows the neighborhoods well and is connected with local lenders, attorneys, inspectors, and tradesmen. If you want a less stressful and faster real estate transaction, get a reliable local agent.
Talk to mortgage lenders. Seek lender recommendations from your agent, and you will likely see a smoother loan application. Local lenders who specialize in your chosen area usually have an underwriting team who communicates within the same building. This makes the whole process accessible, uncomplicated and free from delays.
Get a pre-approval letter. Now that you know how much you can borrow, so stick to a price range that is just within your budget. Go back to your agent and start shopping for homes.
View the actual homes. It is quite easy to fall in love with the pictures, but most available homes look different when you see them in person. Beyond all the staging and lighting effects, try to look at the house the way you would live in it. Will it fit your needs, your budget, and your lifestyle?
Negotiate. This is where the offer, contract drafts, and inspections come in. You should hire a professional home inspector to assess the problems which may be concealed in the building. The lender will also conduct a home appraisal to confirm the home’s value. Your agent should include clauses to your sales contract to protect you from the usual problems during real estate transaction. This is also the part where you put funds in escrow, to cover the closing costs.
Close the transaction. If everything goes well, you can now do a final walkthrough to see if there are any more issues to be resolved. Check if the house complies with your sales agreement. Once these things are done, your agent may now schedule the closing day, where you will sign the documents along with the seller and the title company. Here is where your mortgage loan will be released, and you will receive the keys to your new home.
Having a trusted agent by your side can make your first home buying experience a pleasant one. I will be glad to show you around the beautiful and affordable homes available in Bryan County, OK. Call my number or email me today.
Brian A. Allen is a Realtor and is full of energy, excitement and zeal for every sale. He spent most of his career in marketing and now applies that skill set to the homes his clients want to sell. Click here to learn more about Brian A. Allen