What First Time Home Buyers Need To Know

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What First Time Home Buyers Need To Know

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Most homebuyers start their journey before ever talking to a lender. Home buying begins when you first think of yourself as a prospective homeowner.

Whether you’re browsing homes online or stopping by an in-person open house, you’ve started passive home shopping. Home ownership is something you want for your future and knowing your home buying timeline will help you.

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Buyers can find and buy a home in 15 weeks to eight months.

Once you’ve decided it’s time to buy a home, your first step is to get pre-approved for a mortgage.

Buyers can get pre-approved within a day. Then, the average buyer visits nine homes over eight weeks before finding their ideal home.

After you submit an offer and contract, it usually takes 49 days to close and get the keys. With these estimates, you can move into a new home in four months or less.

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These time frames can vary because some lenders can close quickly, some buyers take longer to choose a home, and some sellers take longer to accept an offer.

Here’s every home buying step you can expect, from looking at offers to moving into your new home.

It’s time to determine your home ownership goals. Do you need more space for a growing family? Some buyers want a yard for their pets or outdoor hobbies. Others want to build wealth by investing in a home.

Your goals will help you decide what kind of home you want and when you want to move.

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Now is a good time to review your finances and create a monthly budget. A specific budget will help you determine how much you need to pay for your monthly mortgage. It will also help you set savings goals for your down payment and closing costs if you don’t choose 100% financing.

If you’re worried about getting your current finances approved, consider down payment assistance and available loan types.

A mortgage lender can help you decide which type of loan is right for you. If necessary, they can also help you consider down payment options and create a strategy to improve your credit score.

Many first-time home buyers choose a traditional mortgage for 30 years. A longer loan term can make homeownership more accessible with a lower monthly mortgage payment.

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Buyers who don’t qualify for a conventional mortgage can consider government-backed loans. FHA loans are a good option for buyers looking for a loan with a low down payment and low credit score requirements.

A mortgage pre-approval shows how many homes you qualify for. The best time to get pre-approved is before you start house hunting. It could be two months or a year ago – whatever makes sense to you.

A pre-approval is a test of your mortgage and required to make a serious offer on a home. Keep in mind that pre-approvals don’t guarantee your mortgage approval or interest rate and typically expire after 90 days and can be renewed if you haven’t found the home you’re looking for within that time.

Buyer’s agents help you find homes, communicate with sellers, and negotiate the sale of a home. An experienced real estate agent knows the neighborhood and provides insight into the local housing market.

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Your mortgage lender can recommend agents in your area. You can also ask family and friends who have worked with them.

The key is to get a real estate agent on your behalf instead of a dual agent representing the seller. This home buyer mistake can prevent both buyer and seller from fair representation.

“Using a broker is like going to court and using the opposing side’s lawyer. Everyone has the right to have their own representation and they should do so. – Michelle Corsi, Steve Wobel Team at Howard Hanna via HGTV.

Most buyers only meet with one real estate agent, but it’s important that you connect with someone. Take the time to build a home buying team that represents you well.

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It’s helpful to know what you need in advance to improve your home search and guide your realtor. If you’re not sure what your dream home will look like, a real estate tour can help you set those expectations.

Keep a list of things you should have, have to have and things that bother you. This will save you time looking around and help you make your final housing decision.

Once you find a home you like, your realtor will help you make an offer on the home. Decide on details such as your cash deposit and contingencies in advance so that your offer letter template is ready.

Real estate laws vary by location, so you may need additional information. Your real estate agent or attorney can ensure that your offer letter complies with local regulations.

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The application is sent to the underwriter for verification. Underwriters look for discrepancies in your credit report, credit score and property details. If something comes up, the underwriter will be in touch with questions.

A home appraisal determines the value of a home based on an inspection by a qualified outside appraiser. An appraisal is essential when buying, selling or refinancing a home.

Appraisers perform a visual inspection of the home and gather specific data about the real estate and housing market. This may include:

As a home buyer, an appraisal allows you to know the value of your home and influence the buying process.

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In the event that the appraisal deems the value of the home to be equal to or greater than the sale price, the sale of the home will proceed. If the appraiser finds the home is worth less than the sale price, the buyer can take action.

If the seller is unwilling to negotiate, your mortgage lender probably won’t approve a mortgage for more than the home’s value. At this point, you can walk out of the store or pay the difference between the appraised value and the purchase price.

A home inspection gives an insight into the current condition of the home and its features. A home inspection is not mandatory, but highly recommended and often included in your contract.

Home inspectors look at the interior and exterior of the home, covering everything from plumbing to the foundation.

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As a buyer, you can choose whether you still want to buy a home based on the results of the report.

If you still love the house but don’t want to pay for a roof replacement, you may be able to negotiate. You can ask the seller to fix the problem or reduce the selling price for repairs.

Buyers have seven days after inspection to decide whether to buy or withdraw from the sale. If you choose to exclude an emergency home inspection in your offer, you choose to buy a home. However, it is still recommended to check for your own information.

Title companies perform title searches to determine who owns the property for sale and who has the right to sell it. They also look for convenience or the right way to prevent you from completing projects like installing a pool.

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The ultimate goal is to ensure that the seller has the right to sell the home and protect the buyer’s future ownership.

It sounds simple, but divorce and inherited property can complicate things. If someone other than the seller has any rights in the property, they can intervene in the sale.

After completing the final reports, you will receive a final statement to review and finalize your loan. It specifies the terms and cost of the loan with exact figures.

A final walk through to view the home is best

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