7 Must Dos For The First Time Homebuyer

7 Must Dos For The First Time Homebuyer

Buying your first home can be nerve-racking. As a first-time homebuyer, you will navigate a process that might include uncertainty, excitement, confusion and frustration.

But preparation and knowledge can help you stay on the right track. Here are seven steps that can improve your chances of having a good homebuying experience.

Know your credit

If you think you may want to buy a home in the near future, your first step -- and perhaps the most important one -- is to watch your credit. Familiarize yourself with your credit history and make sure all the information in your credit reports is accurate.

"The very first thing you need to do is to find out what your credit is and what's being reported about your credit," says Pava Leyrer, chief operating officer for Northern Mortgage Services in Grandville, Mich.

Image titleThis will give you enough time to deal with any errors on your report or improve your credit before you are ready to buy, Leyrer explains.

If all looks good, keep it up and don't max out your credit cards at the furniture store after you sign a contract for the home.

Hire a good team

Buying a home for the first time is supposed to be fun, but it's actually hard work and at some point during the process, you will feel overwhelmed. You'll need to be surrounded by professionals who know what they are doing so they can guide you and provide answers to your questions.

"Formulate a good team to help you," says Rafael Castellanos, an attorney and managing director at Expert Title Insurance in New York. "You don't want someone who is going to pressure you to buy the one or two exclusive listings that they have."

Find an experienced real estate agent, a reputable mortgage professional and a real estate attorney if you can.

Get preapproved

Homebuying does not begin with home searching -- unless you are sitting on a pile of cash and won't need a mortgage. Otherwise, make sure you get a preapproval from a lender before you even begin hunting for a home.

And make sure it's a true preapproval and not just a prequalification. Some lenders will tell you that you prequalify for the loan based on the income and credit information you have provided. That's not good enough for most sellers today.

With a real preapproval, the lender will verify your income documentation and not just check your credit.

Set a budget and stick to it

Don't wait until you are shopping for a house to find out how much home you can afford.

Determine your budget and the monthly payments you can afford and qualify for early in the process.

Most importantly, stick to the plan.

"When you fall in love with a house, all common sense goes out the window," Leyrer says. "Make sure you know what's going to fit your budget and stay in control."

Remember that it's not just about the mortgage payments. Also consider the costs of your property taxes and homeowners insurance.

Time the end of your lease

"How long will it take to find the home I love?" "When will I close?" "When will I move in?"

Until you actually sign a contract to buy your first home, these questions will remain unanswered.

Still, you have to do your best to time your closing and moving with the end of your lease.

As you begin your search for a home, revisit your lease agreement. See when the lease expires, learn about penalties for breaking the lease in case it comes to that and find out the options that are available in case you need a lease extension.

Consider down payment assistance

Many first-time homebuyers overlook down-payment assistance programs that may be available to them through state and local housing authorities.

They often assume that these programs are for low-income buyers only, says Rob Chrane, president of Down Payment Resource. But there are numerous programs available for mid-income buyers.

Some of the programs offer no-interest loans or grants as down-payment assistance and have few strings attached. Be sure to check with your local housing authority and ask for a list of lenders that participate in these programs when you begin shopping for a home.

In Oregon, would-be buyers may qualify for as much as $15,000 toward a down payment or closing costs if they complete a homeownership education program. For details, go to oregon.gov.

Inspect the home before and after

You're making a huge investment. Have it inspected by a reputable home inspector while you are under contract.

"You want to know: how's the roof, the plumbing, the electrical -- there are a lot of variables involved," Castellanos says.

And don't forget to do your final inspection on the day of closing. If you are tempted to get the walk-through inspection out of the way the day before closing, think twice. A lot can happen overnight.

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Phone: 503-957-1179
Dated: February 3rd 2017
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