How to Get Started Buying Your First Home

We’d like to welcome Adam back for the second week of guest blogging as Victoria navigates the jungles of Bali. Today, he’s telling us all about what goes into buying that first dream home of yours. 

Let’s get straight to it…

 Is 2024 your year to buy? Embarking on the journey to homeownership is an exciting venture but can also seem complicated. As a seasoned mortgage lender, I'm here to guide you through the first steps to securing your dream home. Let's explore the key steps you need to take to turn your homeownership aspirations into reality. 

1. Assessing Your Financial Readiness

1. 1. Budgeting: Determine your budget for a home purchase by assessing your income, expenses, and savings. What are you paying for rent, and what are you comfortable with for a mortgage? Understanding your financial limits will help you narrow down your home search.
   2. Credit Check: Review a copy of your credit report and score. A higher credit score can lead to better mortgage terms. Your loan officer can discuss different loan types based on your credit score, downpayment, and income.       

2. Saving for a Down Payment

1. 1. Setting a Down Payment Goal: Many first-time homebuyers don’t realize they only need as little as 1-3% of their own funds. Most first-time buyers have a down payment of 3-5%. Some will have more, but it’s not necessary. Remember, Time in the Market vs. Timing the Market.
   2. Down Payment Assistance Programs: We offer numerous state programs as well as an in-house down payment assistance program called Rezsource. With our program, you can qualify with as little as 1% of your own funds.  

3. Pre-Approval / Application process

1. 1. Why Pre-Approval Matters: A pre-approval letter strengthens the borrower's position in negotiations with sellers. This shows your realtor and the property seller that you are a qualified, legitimate buyer. Understanding your budget and homes within your budget is crucial before starting your search. My team completes a full preapproval with all our clients to ensure they understand their budget and potential monthly costs within their monthly mortgage payment.
   2. The Application Process: During this meeting, the lender gathers essential information about your financial situation, including income, assets, debts, and credit history. This discussion helps the lender understand your needs and recommend suitable mortgage products. The lender may issue a pre-qualification at this time, which provides an estimate of how much the borrower may be eligible to borrow, while a pre-approval will be a more rigorous process that involves a thorough examination of your financial documents. 

4. Research Neighborhoods and Home Features

1. 1. Prioritizing Needs and Wants: Create a list of non-negotiable features you can’t live without. Does the area include the amenities your family needs? How many bedrooms and bathrooms? Lot size for the pets, etc.
   2. Exploring Neighborhoods: Work with an experienced agent. We all want to help family and friends start their budding careers, but trusting inexperience in one of life’s most significant purchases can backfire in more ways than one. Experienced agents will provide tips for researching neighborhoods, schools, amenities, and future developments. 

5. Working with a Real Estate Professional

1. 1. Finding a Mortgage Lender: Ask your friends and family who they used for their mortgage. Unfortunately, there are plenty of horror stories when it comes to mortgages. Check their reviews, interview a couple, and then decide if this person is a good fit for you.   
   2. Finding a Real Estate Agent:  Like mortgage lenders, talk to your friends and family to see what realtors they have used in the past. Meet them, ask questions, and, of course, look at reviews. You’ll be working with them from 60 days to 24 months, and you want to ensure you can communicate effectively with this person.   

Most first-time homebuyers are unaware of how to start, and many have been given misinformation over the years. These five steps provide a basic outline for getting started. With over 20 years of combined experience, we’re dedicated to making the process as easy as possible for our clients. Please reach out to us to get started, and happy holidays!

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