The process of purchasing a home can be stressful for even the most seasoned home buyer. For those who are purchasing their first home, however, this process can quickly become overwhelming. If you are in the market for your first home, there are several steps that you can take before placing an offer on your first home to make the rest of the closing process easier.
Set a budget.
One of the first steps to take when purchasing your first home is to determine a mortgage payment that you can comfortably afford. Be sure to remember that your monthly payment isn’t just principal and interest alone—in many cases, your property taxes, homeowner’s insurance, and mortgage insurance premium will be escrowed and added to your monthly payment. Escrowed costs can increase a mortgage payment by several hundred dollars per month. Homeowner’s association dues can also raise your monthly cost of homeownership, so be sure to keep these fees in mind when looking at homes within a homeowner’s association.
Find a mortgage lender you can trust.
Your lender will be your right-hand man when purchasing your first home, so it’s important to find an experienced lender that you can trust. While you can certainly go through a big-box bank or online mortgage lender if you prefer, don’t forget about local banks and credit unions, which often provide incentives such as lower interest rates. As a home is likely the most expensive investment you’ve made so far, it’s important to obtain a loan through a reputable and experienced lender—choose a lender that you feel comfortable with.
Get pre-approval for a loan.
Getting pre-approved for a home loan doesn’t take a lot of time, and shows potential sellers that you are serious about purchasing a home. Most real estate agents prefer their clients to be pre-approved as well, as this will help your agent search for homes that are comfortably within your budget. Pre-approvals can also save you from any surprises on your credit which could prevent you from obtaining a loan—you’ll know about any credit issues up front rather than finding out halfway through the closing process that you are not approved for a loan.
Keep your records organized.
Once you apply for a home loan, your lender will ask for a good bit of documentation—such as W-2s, tax returns, bank account balances, and pay stubs—to ensure that you are able to afford your mortgage. Start getting financial and employment documentation ready early so that you can find this information easily and quickly.
Educate yourself on the various types of loan options.
Although the 30-year conventional mortgage is the most common type of home loan, it is certainly not the only one. Be sure to explore other options such as FHA loans, VA loans, and shorter-term loans, which might be a better match for you than the run-of-the-mill conventional loan.
Research the area where you are looking to move.
Make sure that you know the ins and outs of the area of your future home. Looking up information about local schools, average home value, and crime rate in the area can give you a heads-up as to the area that you are looking to move into. Try to find information on average commutes, hospitals, and amenities in the area as well. Digging into this information before you place an offer on your first home can spare you from moving into an area that may not suit you.
Purchasing Your First Home? We’re Here Every Step of the Way
If you are in the process of purchasing your first home, you need an attorney you can trust. The real estate team at Boger & Peters is dedicated to clearing up the confusion that can accompany a first-time home purchase and providing quality representation from contract to closing. To speak with a member of our real estate team about your first home purchase, call (803) 252-2880 today.
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