Buying your first home comes with many big decisions so it’s easy to get swept up in the whirlwind of home shopping and to make mistakes that could leave you frustrated throughout the homebuying process. Along with knowing where the pitfalls are, it’s important to know what to expect and what questions to ask.
When you partner with an agent from EXIT Real Estate Consultants, they will guide you through the process, help you learn everything you need to know to become a well-informed home buyer, and provide you the peace of mind you need when making your first home purchase.
Your agent will give you advise at every step along the way. Here are few things to think about when you are looking to start the home-buying process.
For example, it’s a common misconception that you should find the house you are interested in buying before you talk to a mortgage lender. In fact, it is the exact opposite. If you are serious about buying a house in the next 3 to 6 months, you should start by getting preapproved for a home loan. There are multiple reasons for this.
First, it is almost impossible to get your offer taken seriously unless you have a mortgage preapproval. The preapproval sends a message that you’re a serious buyer whose credit and finances pass the test to successfully get a loan.
Next, by learning about all the options and other details related to a home loan, you will be able to fully understand and define the affordable budget range for your new home. Just because you can qualify for a $300,000 home loan doesn’t mean you can afford the monthly payments that come with it. When taking into consideration the mortgage itself, along with home insurance, any HOA dues, potential increases in utilities, as well as the funds needed for the potential purchase of a refrigerator, microwave, and any additional furniture needs, your realistic down payment and monthly budget may not match what you are qualified for. Every borrower’s case is different, so understanding where you sit upfront is very important before taking the first steps down the path to home ownership.
Also, it’s important to talk to more than one mortgage lender. By not comparing offers, you’re potentially leaving thousands of dollars on the table. Shop around with at least three different lenders, as well as a mortgage broker. Try to get rate quotes all in the same day, since rates change regularly. Compare rates, lender fees and loan terms. Don’t discount customer service and lender responsiveness, either; both play key roles in making the mortgage approval process run smoothly.
Loan Programs That Can Help
There are many government loan programs available for first time home buyers that can also help ease the process. Federal Housing Administration (FHA loans), U.S. Department of Veterans Affairs (VA loans), and U.S Department of Agriculture (USDA loans) are some that offer loans to those looking to make their first home purchase. Make sure to ask more about these programs when talking with your mortgage lender.
FHA loans require just 3.5 percent down with a minimum 580 credit score. FHA loans can fill the gap for borrowers who don’t have top-notch credit or little money saved up. The major drawback to these loans, though, is mandatory mortgage insurance, paid both annually and upfront at closing.
VA loans are backed by the VA for eligible active-duty and veteran military service members and their spouses. These loans don’t require a down payment, but some borrowers may pay a funding fee. VA loans are offered through private lenders and come with a cap on lender fees to keep borrowing costs affordable.
USDA loans help moderate- to low-income borrowers buy homes in rural areas. You must purchase a home in a USDA-eligible area and meet certain income limits to qualify. Some USDA loans do not require a down payment for eligible borrowers with low incomes.
These tips are just a couple of examples of how your agent will help provide you the peace of mind you need. Buying your first home is a major life milestone. It’s a place where you’ll put down roots, make memories, and create a space in the community that is truly yours. Navigating each step in the home-buying process can seem intimidating. Your agent from EXIT Real Estate Consultants is here to help you realize your dream of home ownership.