Today’s post is for those of you that are thinking about buying or may already be preparing to buy your first home. Our guest contributor has some great tips to help you confidently navigate through the home buying process. I’d like to introduce you all to Leneiva Head, real estate expert and owner of Welcome Home Realty, based in Nashville, TN.
I absolutely love working with first time home buyers. There is nothing worse than a stressful home buying experience. To overcome the potential pitfalls and barriers, I always share are a few tips to help make the experience much more enjoyable and stress free!
Let’s begin with when you need to spend money as part of the preparation process. There are four times that you will spend money during the process.
- Earnest Money, as a show of good faith that you’re serious about making an offer.
- The home inspection which checks for what’s wrong with the home.
- The appraisal which checks for what the home is worth.
- Closing, where you sign your name several times, get keys, and do your happy dance!
With that foundation, let’s get started!
6 Tips To First Time Home Buying Success
1. Prepare a budget. So often we get so excited about the idea of buying a home that we forget to properly prepare. Take inventory of your current income and expenses…not just your debt. Think about other monthly expenses such as the cable and internet bill, auto insurance, childcare expenses, etc. Be sure to list everything! This will help you determine how much you can comfortably spend each month on your mortgage payment.
Now you’re ready to have a conversation with your lender to discuss financing options.
2. Before you meet with a lender, review your credit report for accuracy. Visit www.annualcreditreport.com for access to your Equifax, Experian, and Transunion credit reports. Address any inaccuracies to ensure that when you meet with a lender, they are reviewing the most accurate report so that you will have access to the best opportunities. Interview potential lenders taking time to ask key questions that will help determine if they’re a good fit for your financing needs. Some lenders will give you tips to improve your credit score. Not all lenders offer the same financing options or interest rates. Some lenders have more stringent credit requirements based on the financing options that are available.
Here are a few starter questions: How long have you been in the industry? What types of loans do you offer? Are you familiar with down payment assistance programs for first time home buyers? What interest rates do you offer? Do you give guidance if there are credit challenges? When are you available? Do you conduct business in person or electronically?
Please remember that down payment assistance programs are typically income based so not everyone will have access to this opportunity. Plan to save for your down payment and closing costs. Once you’ve selected a lender and obtained your loan pre-approval, it’s time to go shopping…within your budget!
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3. Select a REALTOR® to represent you. There’s no fee for having a licensed professional guide you through the home buying process. Take advantage of this opportunity. Understand that you will need to sign an agreement committing to allow the REALTOR® to represent you and you are committing not to work with another REALTOR®. The best way to find a REALTOR® is by referrals. Ask someone who you trust about their home buying experience. If it was positive ask for a recommendation. Then, ask key questions to ensure that you’re a good fit. A few example questions such as: How long have you been in the industry? What type of buyers do you normally represent? Are you full-time or part-time? Are you able to recommend other service providers during the process? When are you available to assist me?
4. Shopping is the fun part but be sure to pay attention to the condition of the homes as you look around. REALTORS® cannot tell you which neighborhood is good or bad. They cannot tell you the diverse makeup of an area either so plan to do your research. Give your REALTOR® your home buying checklist with your must haves so they can properly search for you. Plan to be realistic when shopping. Your REALTOR® can guide you on the expected price range for the area of interest to you. They should provide you with a market analysis to confirm for you the proper pricing. This will help during negotiations. Listen and ask questions if you are ever unsure. You will know THE home the moment you walk in. If you have to talk yourself into liking the home, keep looking. It’s okay you will find it!
5. Understand that your loan is not final approved until the underwriter says yes. As a result, should your lender ask for additional documents after you think you’ve submitted enough, give them what they need knowing that they’re trying to get to the yes that you need in order to close.
6. Ask questions about anything that you don’t understand. Enjoy the process.
Are you ready to begin shopping for your first home? Got any helpful home buyer tips you’d like to share?