A Comprehensive Guide for First Time Home Buyers
It’s exciting to be a first time home buyer. Buying your own home signals the next stage in your life. Yet, the process of getting from finding your dream home to figuring out the financing can be a bit overwhelming. Getting a better understanding of the process can help you navigate the process of finally having your dream home.
What First Time Home Buyers Need to Know
Buying your own home is a major part of the American dream. But because it is a major purchase, the process can be daunting. To make an informed decision, you need to be prepared and understand the process. This means building up your savings, educating yourself on the types of financing available, and taking the process step by step, to make the best decision for your financial situation.
Most Home Buyers Need Financing
Buying your own home is one of the biggest purchases you’ll make, often costing a couple hundred thousand dollars. Chances are, if you’re like most home buyers, you don’t have that kind of cash in savings. Therefore, you’ll want to explore getting a mortgage, which will allow you to pay for your home over several years.
Mortgages are often offered through private lenders. Many of these lenders also offer loans backed by federal programs (VA home loans, FHA loans, etc.). The terms of the loan will vary depending on the type of mortgage, your credit history, and the down payment you make. You can get mortgages that are either fixed-rate (stays the same throughout the life of the loan) or an adjustable-rate (changing at regular intervals). A loan officer can help you understand the process and the benefits of the different types of financing available.
How to Buy Your First Home
Even though the entire process of buying your first home can seem confusing, it doesn’t have to be. Simply breaking the process down into a series of steps can make the process manageable and help you stay organized. Follow these steps and you’ll be in your own home in no time.
- Step 1: Decide what type of home suits your needs
- Step 2: Determine how much mortgage you qualify for (pre-approval)
- Step 3: Figure out how much you can actually afford (look at your total cost)
- Step 4: Calculate how much down payment you can make
- Step 5: Pick a real estate agent to work with
- Step 6: Find a home
- Step 7: Secure financing
- Step 8: Make an offer
- Step 9: Get the home inspected
- Step 10: Close the deal
What You Need To Budget For
While you can get a mortgage to cover the cost of the home, there are still several expenses that you will need to pay for out of pocket. This is one reason why it is important to have substantial savings before you go into purchasing your own home. Here are some of the additional costs you need to budget for as a first time home buyer:
- Real estate agent fees
- Home Inspection
- Down payment
- Closing Costs
- Mortgage payments
- Private Mortgage Insurance payments
- Property Taxes
- Moving Costs
- Maintenance and repairs
There’s No One-Size Fits All Approach
Everyone’s financial situation is different. Therefore, when it comes to buying your first home there is not one single type of mortgage that works for everyone. So many different types of mortgages are available on the market: FHA loans, VA home loans, conventional loans, USDA loans, etc. It is important that you look at different types of financing to make sure you are getting the loan that offers you the most benefit and works with your situation.
Talk To A Loan Officer
Working with a loan officer can help you determine which financing option is the right option for your specific situation as a first time home buyer. Mortgage Solutions Financial offers several different types of financing to help you achieve your dream of owning your own home. Contact one of our loan officers today to learn about the financing options we have available and get on your way to homeownership.