There are several essential things to consider for first time home buyers. Buying a home is one of the biggest investments of a person’s life. It’s exciting and nerve-racking at the same time. Prior to your home search, make sure you have some things in order to make sure the buying process goes smooth.
Review your finances
Do you have good Credit? If not, think about ways you can improve your credit. Pay off debts, car payments, etc really helps. We found that the best place to start is to create a list of every single debt that you currently have. Then write down how much you still need to pay left, how much your payments are and when you need to make those payments. It may seem like a very small task but by always having your financial goals in front of you, it will help you make better spending decisions.
Savings Account
Make sure you have enough money put away for living expenses, emergencies, closing costs and any other unforeseen events when you will need money. You never know what life is going to throw at you, so putting money aside today will place you in a better position in the long run. Start small and set aside $50 or $100 dollars aside every week and then don’t touch it. The importance here is not so much how much you set aside (because everyone is in a different financial situation) it’s about making it a habit to put aside money for your future self.
Find a lender
When shopping for lenders, make sure they have your best interest. A good rule of thumb is to see go for a lender that is trying to answer your questions and really understand why you want to buy a house. Lenders that truly care will inform you about the first time buyer benefits, local programs, and VA loan benefits. They will assess your assets and explain how they will have the opportunity to pre-approve you for your home purchase. They may even have workshops such as the “Smart Home Buyer Workshop” in which they go over in detail as to what each step of the homebuying process is. Lastly, remember to ask about the lender’s fees and mortgage costs. Buying a home is a life-changing decision. Spending a few minutes to get to know your lender will make the whole process as stress-free and worry-free as possible.
Interview Realtors and work with someone you trust
Some realtors don’t spend time with their clients to explain the entire home buying process and how to prepare for it. Your realtor should help guide you and hold your hand every step of the way. A realtor can also provide you with a list of lenders you can use if you do not already have a preferred lender. Your realtor will be your main point of contact throughout the entire buying process, so having someone who is going to look after your best interest and walk you through each step of the process is key.
Your Realtor should discuss:
Your objectives and goals before you buy your first home.
Understanding market dynamics to gather a pulse of this real estate market. ( Is it sellers or buyers market)
House shopping and the different neighborhoods
Writing an offer and what the terms look like
Home Inspections and Timelines
What is Escrow and Title Insurance
This Is A Lot And There’s More
This sounds like a lot of information, and it is! Being a homeowner is a huge financial obligation but if you have everything in order and work with the right people, it is an incredibly rewarding experience! It’s the chance for you to reap the benefits of being your own landlord and build equity rather than wasting your time on renting which eventually increases.
Special Thanks
We would like to thank our friend Kimberly Stone for helping us write this blog post. If you would like to learn more about her and her team, you can start by heading over to her website and be sure to follow Kimberly on Facebook, Linkedin, and Instagram. If you would like to call her directly use (858) 284-0586. (CalBRE:02003140).
If you have any additional questions, we recommend you talk to our loan officer Carl Spiteri (NMLS #286890) by scheduling an appointment online or calling him directly at (619) 544-6444