7 key steps for the
first-time home buyer
1) Know your credit
Check your credit report to see what your credit score is and
what’s being reported on it. This will give you enough time to deal with any
reporting errors on your report or improve your credit before you are ready to purchase.
If your credit report looks good, maintain the score and don’t
max out your credit cards ANYWHERE after you sign a contract for the home.
2) Hire a team
of excellence
Buying a home for the first time is supposed to be fun, but it’s
actually hard work and at some point during this process, you will feel
overwhelmed. You’ll need to be surrounded by professionals who know what they
are doing so they can guide you and provide answers to your questions.
“Structure a good team to help you,” “You don’t want someone who
is going to pressure you to buy the 1 or 2 exclusive listings that
they have.”
Find an experienced real estate agent, a reputable mortgage
professional and a real estate attorney if you can.
3) Get
preapproved for a mortgage
If you are not financially capable of purchasing a home with
cash, your primary plan after checking your credit score should be applying for
a home loan getting a preapproval from a lender before you even begin hunting
for a home. Make sure it’s a true preapproval and not just a prequalification.
Some lenders will tell you that you prequalify for the loan based on the income
and credit information you have provided. That’s not good enough for most
sellers today.
With a real preapproval, the lender will verify your income
documentation and not just check your credit.
Gather all your finances and identification documents to present
them to your Loan Agent and/or Lender!!!
4) Determine a
budget and stick to it
Determine your budget and the monthly payments you can afford
and qualify for early in the process.
Remain focused when searching for your home and try not to let
emotional attachment drive your decision. Stick to your plan and budget!
5) Time the end
of your lease
The Time-Frame to find a home, The Closing Date and The Move In
Date will be questionable as you proceed with your home purchase process.
Until you actually sign a contract to buy your first home, these
questions will remain unanswered.
Still, you have to do your best to time your closing and moving
with the end of your lease.
As
you begin your search for a home, revisit your lease agreement. See when the
lease expires, learn about penalties for breaking the lease in case it comes to
that and find out the options that are available in case you need a lease
extension.
“Moving
is one of the most stressful things you are going to do in your life. Talk to
your landlord and ask, ‘Would you be willing to give me a 2-month extension if
I need it?'”
6) Consider down payment assistance
Many
first-time home buyers overlook down-payment assistance programs that may be
available to them through state and local housing authorities.
They
often assume that these programs are for low-income buyers only but there are
numerous programs available for mid-income buyers also.
Some
of the programs offer no-interest loans or grants as down-payment assistance
and have few strings attached. Be sure to check with your local housing
authority and ask for a list of lenders that participate in these programs when
you begin shopping for a home.
7)
Inspect the home before and right before
You’re
making a huge investment. Have it inspected by a reputable home inspector while
you are under contract.
“You
want to know: how’s the roof, the plumbing, the electrical — there are a lot of
variables involved.
Don’t
forget to do your final walk through on the day of closing. If you are tempted
to get the walk-through inspection out of the way the day before closing, think
twice. A lot can happen overnight.
If
permitted, “Always do a walk-through the day of closing.” This will allow you
to get the most recent visual and condition of your soon to be property.