Buying your first home is a big deal. Here’s how to make it easier.
Stepping over the threshold of your first home can feel like a dream come true. It’s magical, finally having a place to call your own, a safe haven where you can put down roots, creating memories for years to come.
Unfortunately, for most first-time homebuyers, the process can be daunting, creating anxiety that can tarnish that bright dream.
But you can turn those concerns into confidence by following the steps outlined below. You’ll be better equipped for the home-buying process, so you can worry less and focus more on the joy of making your first-home homebuyer dreams a reality.
Think about what moves you
What kind of house are you looking for, and why? What’s necessary, versus nice to have?
Ask yourself these questions:
- How many bedrooms will I need?
- Do I need a big yard?
- How far is the commute to my job?
- What are the local schools like?
- How close will I be to things like parks and shopping?
- Do I want a fixer-upper? Am I handy, and enjoy creating my own vision?
Get super smart about the financial aspects
Having a good grasp of what the loan approval process is really like will help you sleep better at night. Here are the things mortgage lenders look at when considering you for a loan, and will determine the financing options best suited to your situation:
- Your income
- Your credit score
- Outstanding debts (credit cards, student loans, etc.)
- The amount of the down payment you can make
Shop smart with a pre-approved loan
When you’re done exploring your financial options, get pre-approved for your loan to have the best chance of securing your home. This process helps lenders accurately assess your financial situation and gives you an idea of how much home you’ll be able to afford.
Look into homebuyer finance programs
While FHA mortgages offer the lowest interest rates but are only available in more affordable investments, many first-time homebuyers struggle to qualify for a conventional loan which has a typical 20% down payment.
Here are some programs that may help:
- FHA Loans offer lower down payments (3.5—10%) based on credit score
- USDA Loans offer no down payment for homes in select rural or suburban areas
- VA Loans offer no down payment for active military, veterans, and their spouses
- First-time homebuyers can get a $15,000 credit with the First-Time Homebuyer Tax Credit
Find your home
When you’re ready to start looking for your future home, you have many ways to go about it:
- Search real estate websites
- Follow up on word-of-mouth recommendations from family and friends
- Do some boots on the ground research—drive around areas you’re interested in to learn what the homes are like and what’s available
- Get help from an expert—a real estate agent
What a real estate agent can do for you
While you can track down homes on your own through real estate websites, a real estate agent can do much of the heavy lifting for you and lend a valuable personal touch.
Real estate agents have access to thousands of homes through the MLS system—and even more important, they know how to accurately read the information. Plus, they can leverage their personal knowledge of an area, combined with the search criteria you select, to help you home in on ideal properties. A real estate agent will also hold your hand through the process of securing financing and making an offer, could offer to do a title search to ensure nobody else has a claim on the property, and be your advocate when negotiating a final price.
Make an offer
You’ve found the house you want. It fits in every way, you can see yourself and your family there, and you’re ready to make it happen. Now comes your offer, which should consider:
- The seller’s asking price
- Homes available
- Your pre-approved loan amount
- Input from your real estate agent
- The budget you’ll need for closing costs, moving, repairs, and improvements
If you buy resale, get an inspection
There’s more to every home than meets the eye. Even the most beautiful homes can conceal flaws that don’t show themselves until after the sale has closed, may call for extensive (and expensive) repairs—and in some cases can even lead to buyer’s remorse.
Have your home inspected by an impartial trained professional (e.g. not a friend of the seller) who is qualified to evaluate the safety and condition of the property. (Some mortgage lenders may require an inspection on a resale home in order to protect their interest in the property.) If the inspection reveals serious defects the seller didn’t disclose, you’ll typically be able to negotiate, rescind your offer and receive a refund for any initial deposits you may have made.
You did it! Close the sale and celebrate!
At the closing, you can expect to sign a lot of paperwork and pay closing costs, which are usually three to five percent of the purchase price and include things like:
- Mortgage and Impound Fees
- Insurance payments
- Realtor commissions, and fees
Call on Woodside to help make your homebuyer dreams a reality.
At Woodside, we partner with homebuyers to make the process as smooth as it can be, and as special as it should be. Check out our guide to buying your first new home for specific steps to buying your first new home with Woodside Homes. Contact us today, and let us get you home.