For first-time homebuyers, navigating the process of purchasing a home can be both exciting and daunting. Try not to let that overwhelming feeling overrule the excitement, though. If you stay organized and take it one step at a time, everything should flow seamlessly, allowing you to take it all in.
Start by assessing your financial situation and determining how much you can afford to spend on a home. Consider factors such as your income, expenses, savings for a down payment, and the monthly mortgage payment you can comfortably handle. Until you meet with a lender, you can get an estimate of your budget by using an online affordability calculator.
Once you get an idea of what you can comfortably afford, start planning to save for a down payment. While there are mortgage programs that offer zero down payment loans, it’s better to be prepared in case you don’t qualify for those specific loans. A typical down payment is 20% of the purchase price, but that can vary with the different types of mortgages.
Next, you want to start working on getting pre-approved. This involves providing financial documentation to a lender who will assess your creditworthiness and give you an estimate of the loan amount you qualify for. I suggest meeting with a few different lenders to compare loan programs, interest rates, and closing costs. Having a pre-approval not only gives you a clear understanding of your budget but will also give you credibility come time to submit an offer on a home. This is a very important step that should never be skipped before you start touring homes.
If you don’t already have a REALTOR® you intend on working with, now is the time to find one. At no cost to the buyer, a REALTOR® will guide you through the process, help you find suitable properties, negotiate on your behalf, and provide expert advice. Make a list of your homebuying priorities, such as location, size, number of bedrooms, and any additional amenities so they can better customize your search to find your perfect home.
From here, your search officially begins! Touring homes and attending open houses will allow you to get a better idea of what your market offers. Review the property disclosures, take notes, ask questions, and consider factors such as property condition, layout, and potential for future growth or improvement.
Once you are ready to make an offer, be prepared for negotiations with the seller. Your REALTOR® can help you determine an appropriate offer price based on market value and comparable sales. Consider contingencies such as home inspections, financing, and appraisal contingencies to protect your interests during the transaction.
Once your offer is accepted, continue to work closely with your lender, agent, and other professionals to complete the closing process. This involves finalizing your mortgage, conducting a final walkthrough, signing legal documents, and transferring funds. Be thorough and ask questions to ensure a smooth and successful closing.
Remember, buying a home is a significant financial decision, and patience, research, and careful planning are key. Surround yourself with a supportive team of professionals, lean on their expertise, and take the time to understand the process to make informed decisions throughout your homebuying journey. Best of luck to all of the first-time homebuyers!
Eve Leombruno, 2023 MBOR President