First Time Buyers - Getting Prepared
First-Time Home Buyers
If you are a first-time home buyer, use the guide below for helpful hints and tips and learn how to avoid common mistakes when buying your first home in Wesley Chapel, FL.
Pre-Qualification (Down Payment and Closing Costs):
Meet with a mortgage broker and find out how much you can afford to pay for a home. This is also a great step for buyers to learn about down payment assistance and closing cost help if available. Find a great mortgage lender to educate you on your estimated payments on your credit score. Mortgage lenders can vary in their loan products but typically offer a variety of mortgage loans such as FHA loans, USDA loans, VA loans, and conventional financing.
Minimum Credit Score:
A credit report is usually pulled by the loan officer per individual that applies for the mortgage loan. An excellent credit score will usually offer better loan options. Poor credit can get buyers declined for a loan or offer higher than normal mortgage rates. Credit scores are an important part of determining what financial decision you will be making.
There are no income restrictions when applying for a mortgage loan in most cases. However, these loan borrowers applying for payment assistance will be regulated by total household income.
Monthly mortgage payments:
Your monthly payments are made up by paying the principal, interest, property taxes, homeowners insurance, and potentially private mortgage insurance (this is dictated by the loan terms offered). Your lending contact will discuss your monthly payment.
Pre-Approval with your mortgage lender:
While knowing how much you can afford is the first step, sellers will be much more receptive to potential buyers who have been pre-approved. You'll also avoid being disappointed when going after homes that are out of your price range. With Pre-Approval, the buyer actually applies for a mortgage and receives a commitment in writing from a lender. This way, assuming the home you're interested in is at or under the amount you are pre-qualified for, the seller knows immediately that you are a serious buyer for that property. Closing Costs for pre-approval are generally nominal and lenders will usually permit you to pay them when you close your loan (they can also be covered by down payment assistance if you meet the qualifying criteria).
List of Needs & Wants:
Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes - things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.
Representation by a Professional:
Consider hiring your own realtor, one who is working for you, the buyer, not the seller. This can help you a great deal in the buying process when it's time to begin.
Save money for normal expenses you can incur such as earnest money deposit, home inspection, appraisal, and survey (each state could be different in additional expense. See your local realtor discuss the state norm for expenses.
Focus & Organization:
In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:
- One or more detailed maps with your areas of interest highlighted.
- A list or file of the properties that your agent has shown to you.
- Paper and pen for taking notes as you search. This can be useful in understanding the housing market, writing down the living expenses, and jotting down notes that will can get you closer to making financial decisions.
- A camera to snap pictures of homes you have toured to help you remember your favorites and features you really liked.
Visualize the house empty & with your decor:
Are the rooms laid out to fit your needs? Is there enough light?
Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later. Speaking to your real estate agent and mortgage lenders is of great help in the part of the home buying process.
A few extra dollars well spent now may save you big expenses in the long run. Don't forget such essentials as:
- Include inspection & mortgage contingencies in your written offer.
- Has the property been inspected by a professional inspector?
- Request a second walk-through to take place within 24 hours of closing.
- You want to check to see that no changes have been made that were not agreed on (i.e., a nice chandelier that you assumed came with the sale having been replaced by a cheap ceiling light).
All the above may seem rather overwhelming. That is why having a professional represent you and keep track of all the details for you is highly recommended. Please contact us directly to discuss any of these matters in further detail.