First-Time Buyer | Things to Know
So, you’ve decided to ditch the rent payment and purchase your own home. This is one of the most exciting moments of your life! Your mind is racing with ideas about that kitchen island you’ve been dreaming of, that family room you finally get to mount your flat screen TV in, or the perfect backyard for the four-legged members of your family.
During all this excitement it can be easy to get swept up in the process; however, there’s important things you should be aware of. Working with an experienced real estate agent will help you navigate the home buying process and allow you to be confident in your journey, but it helps to know what to look for!
Below are some quick tips on some things you should be aware of as a first-time home buyer.
The Lender
Before you start planning your lineup of Saturday homes to tour, it’s best to get in contact with a mortgage lender. If you were to find a house you loved and decided to make an offer, they’re going to want to see a pre-approval letter from a lender right away. You might end up losing out on a home you fell in love with. In addition, a mortgage lender will be able to go over your finances with you and help you understand what monthly payment you can afford. They help calculate all those costs you might not initially think about such as a down payment, mortgage insurance, property taxes, and more. They’ll also help walk you through all of your loan options which includes much more than just a conventional loan with a 20% down payment. Some government-insured loans require just a 3.5% down or even zero down payment in some cases. Just make sure to talk to more than one lender in the beginning. Shop around with at least three different lenders, as well as a mortgage broker. Compare rates, lender fees and loan terms. Don’t discount customer service and lender responsiveness; both play key roles in making the mortgage approval process run smoothly.
THE COST
A lender will be able to assist with this part, but it’s important that you’re aware of all the costs of home ownership as well. By anticipating some of the not-so-obvious costs, you’ll be able to enjoy your home without the stress of finances. It’s important you purchase a home that doesn’t make you push yourself financially that way you can keep money in savings (which you’ll be thankful for if a repair emergency happens). You should aim to have three to six months of living expenses in an emergency fund.
The Purchase
Be sure to take your time to find the right home; it’s a big decision that you have to live with (literally!), so don’t rush the process. Just remember that finding the perfect home is often like finding a needle in a haystack. You can always make repairs, additions, and upgrades down the road. Some loan programs will even let you roll the cost of repairs into your mortgage, so keep an open mind! If you do find the perfect home that’s slightly over your budget, it’s best to not make an emotional purchase and to stick to your budget; you’ll be thankful later on.
If you’re ready to purchase your first home, reach out to the Sessoms Team to start your journey today.