A Guide for First Time Home Buyers

Buying a home is a complicated and at times tough thing but there are some things you can do to make it easier. Educate yourself on the types of mortgages that are available for starters. There are so many different types FHA, 80/20, Interest only, ect. Familiarize yourself with the different rules and qualifications for the main types of mortgages.

Once you feel comfortable with your mortgage options it is time to look for a lender. While it is best to choose a lender based on references, it is also important to do your own research and learn about the lenders you have available to you. Some of the different types of lenders are banks, mortgage brokers, and credit unions. They each have advantages and disadvantages so research well and make sure you find a company that explains the process well and is willing to work with you. As a first time homebuyer there are mortgages out there that are specifically geared toward you such as Fannie Mae or FHA.

Once you have selected a lender get pre-approved before you start your house search. Pre-qualify is a very preliminary way of a lender to see if you can realistically afford a home. Pre-approved means that lender has looked at your particular credit and income ratio and has determined a capped spending limit you have to buy a house with. Most sellers will not even entertain offers from buyers who have not been pre-approved. So get that out of the way before you start looking for the house/property.

If you have less than perfect credit it is important to get copies of all three credit reports and pay off any outstanding debts. There is not a reputable lender anywhere that will give you a loan with outstanding debts on your credit reports. You can still be pre-approved possibly but you will have to take care of the debt before you actually close on the house. You can either order your credit reports through companies that charge for the service or if you haven’t done so already, you are entitled to one free credit report each year from each reporting agency. www.annualcreditreport.com is the official site for the FREE reports. Check to see if your state has already been rolled out. If your state has not been rolled out yet then you will need to purchase your reports from the credit agencies themselves.

You are now pre-approved and ready to start looking for a realtor. You can start by searching for homes on the web. You can get a good idea as to what is out there in your price range and location. Look for homes a lot on the web to give you an idea of what you like and dislike in a home. Do you need a big yard? How about a garage? Would you dislike living in a ranch style home? The more homes you see the sharper your opinion becomes. Online searches should never take the place of actually seeing a home in person, but at least it is a great start and a good way of weeding out homes from the list before you go see it in person.

Ask friends and relatives about their favorite realtors. If you get a bad realtor your whole house buying experience can be ruined. Don’t be afraid to ask co-workers, bosses, friends, and relatives to point you in the right direction.

When you have found the realtor of your choice, call and make and appointment. It is better to find a buyer’s realtor. That means your real estate agent represents YOU ONLY. Therefore all transactions will be in YOUR best interest. If you get a realtor that represents you and the seller more than likely the favor will be to the seller. So be aware! Ask the real estate agent what type of realtor they will be in your case.

Don’t set a limit for the number of homes you go see. Just look at homes as long as you can. The more homes you see the better. Never settle for the first home you view. It helps to write a list of things your home HAS to have, things you would like your home to have, and things you can live without but would like. That makes shopping for a new house a lot easier when you know what you need, want, and can live without.

When looking at homes remember wall color, carpet color, ect are just cosmetic. If it is something you can easily change down the road, don’t let it stop you from putting an offer in. Look at the potential of the home and see if it is a realistic goal for your family and if you can live with things the way they look until you can change it.

When making an offer, know that buyers can request the sellers pay all or most of the closing costs. You can also put in other stipulations about the house itself or the fees. Don’t put too many stipulations in the contract or the seller might choose another buyer over you.

Hire a lawyer and a home inspector for the best results. You are buying the most important and possibly most expensive thing in your life. Make sure you are making the right choice. Hire a home inspector to make sure the house is in livable condition. An inspector can also tell you if things need to be replaced in the home soon, such as the hot water heater or air conditioning unit, and which things needs servicing now like a leaky roof. These are things you can add to your contract for the seller to fix and pay for before you will agree to buy the house.

The lawyer is there to make sure all documents being signed are legal and are beneficial to you.

Ask lots of questions. Don’t let anything go by without asking the appropriate person to clarify. Lawyer, inspector, realtor, lender…these are all people that will be here to assist you so make sure you understand everything that is going on.

Closing day have your money ready (closing costs, inspection fees, lawyer fee, ect) and your signing hand warmed up. There will be lots of forms to read over and sign and lots of money being passed around. A typical closing takes about 45 minutes but if problems arise can take hours or even be set forward a few days so be prepared.

Enjoy your new home!