Tips for Buying Your First Home
If you’re thinking about buying a home for the first time, but you’re not sure where to start, we’re here to help. Buying a home is probably the biggest purchase you’ll make in your lifetime, but it’s also one of the most rewarding. Your home buying experience can be an enjoyable one, as long as you set a solid foundation for success with these home buying tips.
The first step is to think about the big picture and determine the plans you have for your future. Think about what your life will look like for the next 5 years and any major changes that may come during that time, such as a new job, relocating, getting married, having a baby, etc. How will buying a home fit into that picture? You need to be sure that adding a new home into your plan fits with your other long-term goals.
Check Your Credit Score
Since you will most likely need to apply for a mortgage loan before purchasing the home, you will need to check your credit. The better your credit, the more likely your chances to be approved for a loan with better rates and terms, so it’s important to know where you stand. You can start by requesting a free copy of your credit report and reviewing it carefully to make sure your information is correct. You are entitled to one free credit report every year from AnnualCreditReport.com. If you notice any errors on your report, contact the credit bureaus to have them removed or corrected. You can use an app or service that tracks your credit score, or eligible members are able to view their FICO® Score for free within Digital Banking. And remember that checking your credit score won’t lower it. Knowing your score will help you prepare for buying a home by making you aware of any issues you may need to address before applying for a mortgage loan.
Understand Your Finances
Besides knowing your credit score, it’s also important to know your full financial picture including your income, assets, and liabilities. These factors help your mortgage lender determine how much home you can afford (link to 4/11/18 How Much Home You Can Afford article, if we can find it). Examine your spending habits to determine if there are areas where you can cut back to help you save enough for a down payment and closing costs. Use our Home Buying Calculators to help you assess how much you will need for a down payment, what your monthly payments will look like, and more. Once you have a good understanding of your finances, you can get preapproved for a mortgage loan.
Choose Financial Partners You Can Trust
Buying your first home is a big step, and you want to feel comfortable throughout the entire process. Working with people you can trust will help put your mind at ease, so it’s important to select a mortgage lender and real estate agent that you trust to help you find what you are looking for. For example, military members may feel more assured working with a lender and an agent who have experience assisting active duty military, veterans, and their families. At Robins Financial, we are committed to serving those who serve by providing VA Loans to eligible veterans, service members, and surviving spouses. Carefully consider your options to make sure you select the mortgage loan and lender that best fits your needs and budget.
Find Your Home
Your preapproval letter lets you know how much you are able to take out in a mortgage loan, so it will give you a more concrete idea of your price range. Getting preapproved helps ensure you won’t go over budget and fall in love with a home you can’t afford. A preapproval also shows real estate agents and sellers that you are a serious buyer. Your real estate agent will help you search for homes within your price range that meet the qualities you are looking for. It might be helpful for you to make a list to share with your agent of features that are must-haves, wants you can live without, and total deal-breakers. When you find homes you are interested in, your agent will set up home tours and can provide history of the homes as well as information on the neighborhoods and general areas where the homes are located.
Apply for a Loan
Once you’ve found the right home, your real estate agent will help you put in an offer. You and the seller may counter the presented offers up to a few times, but your agent will assist you with that stage of the process. Once the offer is accepted, your next step is to complete your loan application. You’ll meet again with your mortgage loan officer to lock in your interest rate and select the mortgage loan program that best suits your needs. You will receive preliminary and then final documentation regarding your loan. Review these carefully with your loan specialist and address any questions you may have. During this stage you will also arrange the appraisal, set up your insurance, and schedule your closing date.
Close the Deal
The closing is the final stage of the home buying process. At least three days prior to closing, you will receive your Closing Disclosure. This document provides a summary of the loan terms, costs, closing costs, and any additional disclosures. Verify whether you or the seller are responsible for paying closing costs if you haven’t already, and be sure to ask what form of payment is required, such as wire transfer, cashier’s check, etc. so you can have the closing costs payment in hand at your scheduled closing date. Additionally, you will need to sign several documents to finalize your home purchase. After all the signatures are in place, will be handed the keys to your new home!
If you’re ready to apply for a mortgage loan, let our team help you get the loan you need. Visit our Mortgage Loan Center to learn more about the mortgage process, use our Home Buying Calculators to get a picture of what your home loan will look like, and check out our Buying a Home video series on YouTube for more information about home buying. Apply for a mortgage loan online or set up an appointment to speak with one of our Mortgage Loan Officers.