First Time Home Buyers: 5 Steps to Get Started
Are you ready to buy your first home? Buying a house is one of the largest investments you will make in your lifetime and being a first time home buyer can make the whole process daunting and confusing. Here are a few steps to get you on the right track.
Step #1 - Check Your Credit
When you begin working with a loan officer, one of the first questions they'll ask is what your credit profile is like. The bank or lender will run a credit check to assess your level of risk as a borrower including your ratio of debt to income and decide how likely you are to make your mortgage payments on time. Since this is your first time buying a home, do your own credit check first via www.AnnualCreditReport.com to make sure there are no errors.
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Step #2 - Talk with a Mortgage Professional
Once you have your credit report, find a mortgage professional with whom you can discuss your options. A loan officer should be able to assess your debt and income to pre-qualify you for a loan amount. If it turns out that your credit score is too low for a regular loan, there are other options such as an FHA loan. There are also VA and Private Money loan options. Remember to be honest and up front with your mortgage professional about your situation so they can provide you the best options to fit your financial goals.
Step #3 - Get a Real Estate Agent
A qualified real estate agent is a good idea for all home buyers, but especially essential for first time home buyers. A real estate agent will work with you to determine the kind of home that will best meet your needs including size, location and price. They can preview homes online, email you options and physically show you homes that fit your requirements.
Step #4 - Make an Offer
If you've made it this far - congrats, you've found a house and you're ready to make an offer! Now you have a decision to make - How much are you willing to pay for it? Work with your agent (and loan officer if necessary) to write up your offer on the house. Your real estate agent will then present this officer to listing agent who will gather all offers made and present them to the seller. The seller may accept, reject or make a counter-offer. This negotiation process can be stressful. If you want to make sure your offer is more seriously considered, you may make certain requests or concessions in your offer to appeal over other buyers. Once you’ve reached a figure that’s agreeable for everyone, you can make a deposit, and the home will go into escrow. When this happens, it means that the house is taken off the market.
Step #5 - Get an Inspection and/or Appraisal
Your offer has been accepted and you're about to close on your first home! But before you get too excited, make sure you take the time to find out exactly what shape the house is in. Even a house that seems perfect cosmetically can have serious problems or defects. This is when it is a good idea to get a home inspection to identify any issues that the sellers haven't disclosed. Keep in mind that there are also issues that an appraiser can point out that a lender or bank will require be remedied in order to complete the sale. If it turns out there are major problems, you can either rescind your offer and get your deposit back, or negotiate with the seller to make the necessary repairs or lower the price.
We know that buying a home is an adventure and rest assured that being a first time home buyer is a wonderful milestone. We want to ease your stress and help you each step of the way. If you have any questions, don't hesitate to call your mortgage professional or real estate agent. We're here to help!
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