A Guide for First-Time Home Buyers
Taking the leap into homeownership is an important step in anyone's life. The challenge of buying a home for the first time can seem so daunting that it's tempting to either just go with the first house that falls in your price range or continue to rent. To help you demystify the process and get the most out of the purchase, BayCoast Mortgage will help you examine what you'll need to consider before you buy, what you can expect from the buying process itself, and some tips to make life easier after you purchase your first home.
BEFORE YOU BUY:
Access your Needs
The first thing you'll need to determine is what your long-term goals are and how home ownership fits in with those plans. It could be that you're simply looking to transform all those "wasted" rent payments into mortgage payments that actually give you something tangible. Think about your family and whether you have plans to marry or having children in the near future. Factor in your job and if it's stable, whether you plan to stay long term or if you are itching to try something new.
Which purchases makes the most sense for me?
Whether you're purchasing a traditional single-family home, townhouse, condo etc, each option has its pros and cons, depending on your homeownership goals, so you need to decide which type of property will help you reach those goals. Purchasing a home that fits both your needs and wants can factor into the decision making process. Your list should include basic desires like neighborhood and size, all the way down to smaller details like bathroom layout and a kitchen that comes equipped with trustworthy appliances.
Do the Math
A loan officer at BayCoast Mortgage will help you determine how much money you will need to borrow in order to purchase your home. Factors like how much other debt you have, your monthly income and how long you've been at your current job all contribute to your ability to qualify for a loan. Many people focus on the down payment when they think about buying a home. Yes, the down payment is usually a large chunk of money. But there are other upfront costs you need to think about - taxes, property insurance and closing costs for example. Closing costs encompass many fees including origination, underwriting, appraisal and title insurance. It can all add up so it's good to know it ahead of time.
Once you're ready to move forward with BayCoast Mortgage, you'll want to have all your documents ready to make the process go smoothly. In most cases, you will need government issued ID, a credit report, a verification form from your employer, W2 forms, federal tax returns and bank and asset statements. Some of these documents would also have helped you to figure out how financially ready you are to buy a home.
THE BUYING PROCESS
Finding a home
Make sure to take advantage of all the available options for finding homes on the market, including using your real estate agent, searching for listings online and driving around the neighborhoods that interest you. Real-estate agents can provide you with a vast amount of information and guidance about the entire process. Remember to tell the agent that you are a first-time homebuyer.
First-time homebuyers have a wide variety of options with BayCoast Mortgage to help them get in a home, including federally-backed loans for homebuyers who don't have the standard 20% minimum down payment. Your mortgage interest rate will have a major impact on the total price you pay for your home so consider all options when choosing the program that best fits your needs.
Make an offer
Your real estate agent will help you decide how much money you want to offer for the house along with any conditions you want to ask for. Your agent will then present the offer to the seller's agent; the seller will either accept your offer or issue a counter-offer. When you reach an agreement, you'll make a good-faith deposit and the process then transitions into escrow.
A trained professional will inspect the property for the quality, safety and overall condition of your potential new home. If the home inspection reveals serious defects that the seller did not disclose, you'll generally be able to rescind your offer and get the deposit back. Negotiating to have the seller make the repairs or discount the selling price are other options if you find yourself in the situation.
If the inspection didn't reveal and significant problems, you should be ready to close. Closing involves signing a significant amount of paperwork in a very short time period. In the final stages of your purchase additional costs may include having the home appraised, doing a title search, obtaining private mortgage insurance or a piggyback loan if your down payment is less that 20%.
BayCoast Mortgage and this brief overview will help you on your path towards filling in any gaps in your home-buying knowledge. Remember that the more you educate yourself about the process beforehand, the less stressful it will be and the more likely you will be to get the house you want for a price you can afford.