First Time Homebuyer Guide
If you're thinking of buying a home, congratulations! Owning your own home is a huge accomplishment. But before you start shopping for houses, there are a few things you need to do.And we've outlined them for you here!
Step One - Determine Your Goals
The first step is to determine your goals. Why do you want to buy a home? Is it because you're tired of renting? Or because you want to start building equity? Maybe you're getting married and need more space.
Whatever your reasons, it's important to be clear about your goals before you start looking for a home. That way, you can narrow your search and focus on the homes you want!
Use the Below Questions
to Determine Your Goals
Which type of property do I want?
- Single Family, Apartment, Townhome, Condo, Duplex, Triplex, or 4 units. (There are pros and cons associated with every type of property).
Which location do I want to live in?
- Search by zip code(s) for the area you're looking to live. This will help your Mortgage Advisor determine if the loan amount is conforming or nonconforming which very important to know, when structuring your loan.
How will I use the property?
- Will I use it as my primary residence, an investment property, or both? This will help determine which loan will work best for you
Do I want a fixer-upper or a move-in ready home?
- There are loan programs designed to help you fix up a home before moving into it.
When do I want to move?
- When is my lease up? Is my rent month to month?
What purchase price do I want?
How much do I want to put down?
These are the most important questions to ask yourself while deciding your goals. Once you have answers to these questions, you're ready for step two!
Step Two – Mortgage Advisor
The second step is to find and speak with a trusted Mortgage Advisor. This is an important step because that advisor will be able to illustrate how your loan will be structured, and if your goal can be met within the time frame you want. It's also a good idea to speak with a mortgage advisor before you start shopping for a home because, there is nothing worse than getting your hopes up, only to find out you can't have the home you want. Plus, you don't want to waste your time.
Be prepared to speak to a Mortgage Advisor about:
- Your goals
- Your income and employment history
- Your assets and debts
- Your credit scores
- The type of loan you're looking for (fixed rate, adjustable rate, etc)
- Your Mortgage Advisor will help you figure that out
- The amount you're looking to borrow
- The down payment you're able to make
- The length of the loan you want
- 30, 25, 20, 15, 10 years etc
Step
Three –
Pre-Approval
A pre-approval is essentially verifying everything in step 2. To do that you will need to provide some financial information to your lender including your income statements, bank statements, other asset statements (401k, IRA, etc.), and the Mortgage Advisor will pull your credit to confirm both FICO score and debts.
Note: A Pre-Approval Letter will state the amount of money you're approved for and can be used when negotiating with a seller.
Step Four – Finding a Real Estate Advisor
It is important to find a real estate advisor who can listen and understand your goals.
Along with being able to:
• Effectively communicate with all parties involved in the transaction.
• have A deep understanding of your local real estate market.
• Have Strong negotiation skills to help you get the best possible price on your home.
Step Five – Home Shopping
Now comes the fun part, shopping for a home!
With your mortgage and real estate advisor by your side, you're ready to start looking for a home that fits your budget and meets your goals.
Remember to stay within your budget (your advisors will help you) and don't get too emotionally attached to any one property. There are plenty of homes out there, and you will find the perfect one for you.
Step Six – Closing
Once your offer is accepted by the home seller, you’ll start to go through the closing process. This is also the time when escrow has been opened.
To help the entire process go smoothly, you need to know what to expect when closing on your new home.
The closing process can take anywhere from 15 to 90 days, depending on how the offer was structured. This gives you plenty of time to get organized and prepare to move into your new home.
Important notes - After you have received your pre-approval:
• Do not change jobs – or let your Mortgage Advisor know
• Do not buy or lease a new car
• Do not buy new furniture on store credit
• Do not run up credit cards with cash advances
• Do not switch banks or move your money to another institution
• Do not pay off existing accounts unless your Mortgage Advisor requests it
• Do not make any large purchases
• Do not make late payments on any bills
If you do any of the above during the transaction- you could end up delaying or killing your loan altogether.
If you have any questions or you're ready to begin your home-buying journey, please reach out to us and we'll connect you with a trusted advisors in your area.
If you're interested in learning more about the process - we offer First-Time Homebuyer Consultations that can help get you started! Happy house hunting!
DRE #02029659 | NMLS #1816562
About Us
Good Home Capital is the only company you'll need for all your real estate needs. We're committed to providing our clients with the highest quality of services and loan programs available. From finding your dream home, to getting the best mortgage rate, to ensuring that your property is properly managed - we've got you covered. Contact us today and let us help you find the perfect home for you and your family.
