Buying your first home is an exciting milestone. But before you pop the champagne—it’s important that you know exactly what to expect during the home buying process.
The home purchasing process is separated into four categories. We’ve broken them down for you with tips and advice for each step of the process. The four key components to buying your first house are:
- Preparing to buy your first home
- Obtaining a mortgage
- Home shopping
- Home purchasing
Becoming well-versed on each of these processes will make your first-time home buying experience much simpler and less stressful.
Preparing to buy your first home
The nervous jitters may already be kicking in during the home buying preparation process. Don’t worry, our advice will help you save money and find your perfect home. Here are two tips for the preparation process:
- Start saving ASAP – You’ll need money for your down payment on the mortgage, closing costs and move-in expenses. The earlier you start saving, the better prepared you’ll be.
- Prepare your credit – Now is the time to check your credit score and make sure it’s as strong as it can be. Your credit score will determine whether or not you qualify for a mortgage. It will also affect the interest rate offered to you by lenders. The better your score, the better luck you’ll have during the mortgage process.
Obtaining a mortgage
If this is your first time buying a home, then it’s more than likely your first time looking for a mortgage. Here are three tips to help you land the perfect mortgage:
- Explore your options – There are plenty of mortgage options available. Each option will require a certain eligibility and down payment. Different options include Conventional Mortgages, FHA loans, USDA loans and VA loans. You also have options for your mortgage term. Most home buyers choose a 30-year fixed-rate mortgage, which is paid off in 30 years and the interest rate doesn’t change. A 15-year loan typically has a lower interest rate, but larger monthly payments.
- Look for first-time home buyer assistance programs – Some areas offer first-time home buyer programs. This could get you low-interest-rate mortgages, down payment assistance and even assistance with closing costs.
- Get a preapproval letter – A preapproval letter is a lender’s offer to loan you a certain amount under specific terms. This shows real estate agents and sellers that you’re serious about buying. This could also set you ahead of other buyers. Apply for preapproval as soon as you’re ready to begin the home shopping process.
Home Shopping
Home shopping can be exciting and stressful all at the same time. You want to find the perfect house without spending more than you can afford. Here are 2 simple tips to make the experience go smoothly.
- Choose the right real estate agent – Don’t just go with the first real estate agent you see on a billboard. Make sure to find an agent that will search the entire market for homes that meet your needs, as well as guide you through the negotiation and closing process. Getting referrals from other home buyers is never a bad idea.
- Stick to your budget – Have an idea of what kind of home and neighborhood you’re looking for, but make sure you stay within budget. Staying within budget will save you from future financial stress.
Home purchasing
Yay, you’ve made it to the final step! Here’s how to land your perfect home during the home purchasing process:
- Pay for a home inspection – A home inspection is a thorough evaluation of the home. This is where you look for potential problems. Don’t be afraid to ask questions during this process—you want to know everything you can about the house before making a commitment.
- Negotiate with the seller – Check with your real estate agent to understand the local market and decide if you can negotiate. Your negotiating power will be determined by the market. If you have room to negotiate, it could end up saving you money.
It may seem like a lot but taking this advice into account could save you money and help you find the perfect home. Happy house hunting!
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