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8 Important Steps for First-Time Home Buyers

Updated: Jan 4

Are you ready to buy a home? You’ve started your down payment savings and virtually shopped around to help get an idea of what you want.

Any purchase of this magnitude can be stressful, but with a bit of help, you can attain homeownership with the least amount of static as possible.

8 steps for first time home buyers

It’s an exciting time in your life, and you want to keep it that way by knowing what to expect.

Here are 8 simple steps to buying a home!

Plan for your Home

Search for a Lender

Attain a Pre-Approval Letter

Find a Realtor

Make a Choice and Make an Offer

Critical Hires for Due Diligence

Final Loan Processing and Underwriting

Close and Turn the Key

Plan for a Home and Your Budget

Before purchasing a home, you must plan and budget for your life with this new major purchase.

When you own a home, everything falls on you. Now, I'm sure you're used to paying your own utilities, so this may not shock your finances.

But.......These are not the only expenses homeowners have to think about.

In addition to your mortgage, which usually includes your property taxes and home insurance, you may have to add additional insurances to keep your property safe.

For example, some homeowners have to add flood insurance and/or mortgage insurance to qualify for a home loan, depending on the area they live in and the type of loan they have.

Calculate the cost of owning a home.

Other things, like landscape maintenance and repairs, all fall on the homebuyer.

If you're in a neighborhood with an HOA, failure to maintain your property will annoy them, and they will annoy you.

So, when budgeting for your home, consider all the additional expenses you're responsible for each month.

Create a monthly budget to determine what you're willing to spend each month on your new home.

This is called passive home-buying, and it helps.

Search for a Lender

Someone once said that all good things come in three's. That's the case when looking for lending for your new home.

Always check with at least 3 lenders before you choose. You might think, "I don't want 3 hard inquiries on my credit."

And you're right; you don't.

But the great thing about checking with three lenders back to back is that the credit bureaus will count this as one inquiry.

In fact, if there are multiple inquiries on your account from the same type of lender within 15 to 45 days, it will count as 1 inquiry.

The credit bereaus realize that you are shopping around and they consider this, so your credit is safe.

But why so many?

You want the best rate you can get, and this may not be with the first lender or the second. Never sell yourself short by going with the first lender that says "yes".

You also have to realize that not all lenders offer the same products. There are so many programs and products for first-time homebuyers.

To make sure you have the best offers compare lenders.

Attain a Pre-Approval Letter

You'll love yourself for this move, and your realtor will love you too.

Attaining a pre-approval letter or a pre-qualified letter from your lender lets you know what you can afford.

You want to have this letter before you go shopping for homes. If not, you'll be disappointed when finding a home you love, only to learn you can't afford it.

Get pre-approved for a home loan.

Also, if you have a realtor and you find a home, you'll need this letter when you put in an offer for the home. Sellers won't accept your offer without it.

I have made this mistake before, which annoys my awesome realtor, and I also annoy myself because I ended up not being able to make an offer.

I learned the hard way and vowed never to do that again.

Find a Realtor

Here's a big myth about Realtors: they help you with your credit and finance of a home.

This is not true. In fact, your realtor is the last person you'll want to go to when you're looking for a home.

They can't help you improve your finances, and they can't help you get approved for a loan.

These things have to happen before you meet with the Realtor.

So, once you've attained a pre-approval letter, you can look for a Realtor you can trust. This may take a little research on your part.

A Realtor will help you find a home you love and a price you can live with.

Realtors help you find a home that will work for your family.

You want to tell them everything you'll need in your first home, and they search in their database to find the home you want.

Most importantly, in your price range.

Here's what you'll get with a Realtor, someone who'll:

  • Have in-depth knowledge of the area where you wish to live

  • Have extensive knowledge of the home buying process and be able to answer your questions

  • Complete the paper needed to submit your offer

  • Keep the lines of communication open to give you support on your journey

That sounds like a great deal to me!