Buying your first home can be very overwhelming and stressful, BUT it doesn’t have to be. There are tons of ways that you can prepare and many resources that can make the process a bit easier. Keep reading and below I will share some tips that I learned during my first time purchasing a home.
Repair Credit Score & Build Savings
This is definitely one of the most important steps in preparing to purchase a home for the first time.
-A HIGHER credit score increases your lenders confidence that you will make payments on time and will help you qualify for better mortgage rates and fees.
-Pay off any collections and lower your balances on any credit cards you may have. Keep in mind, 30% usage on credit cards looks best to any lender. Do not pay off cards completely, as open accounts are good for your credit file.
-Pay all of your bills on time and make all credit card payments as scheduled.
-DO NOT apply for any new credit or loans! (3-6 months prior to your homebuying process and during until AFTER closing)
-Open a Savings Account specifically for home buying funds; keep in mind of down payment, closing and moving costs.
Get Pre-Approved for a Mortgage
Before going out and searching for your first home, talk to a few different lenders and begin the process of getting pre-approved. Mortgage lenders will look at your financial background, any debts you may have, and they will make the determination if they will be willing to loan you the money. They also will let you know exactly what amount you will be able to afford after all bills, expenses, etc. are accounted for.
-Figure out what your price range is based off of what you CAN AFFORD!
-Compare rates and terms with different lenders to ensure you are getting the best mortgage.
-Gather paystubs, tax information and any large expense reports that go back at least 2 years.
-Submit documentation to underwriters in a timely manner as they will work on your file for weeks before an approval is obtained.
Find a Real Estate Agent and Begin Your Home Search
It is important to find a GREAT Real Estate agent to help you search for homes, negotiate deals and answer any questions you may have during the process.
-Ask your Realtor about First Time Home Buying incentives, programs and grants! (There are MANY!)
-Browse in different neighborhoods and compare what you like and dislike about each to help make a decision.
-Figure out what are your MUST HAVES and WANTS in a home to help narrow down your options.
-Schedule tours and attend open houses to see the inside of homes that you like!
Make an Offer
Finally found your dream home? Now its time to make an offer to the seller! YAY!
-Set your Budget limits and clarify what your limit is. Only write up offers for homes you can truly afford.
-Determine your flexibility; Can you offer a large downpayment? Do you need an option period?
-Figre out how much earnest money you can offer to the sellers. It usually could average between 1-3% of the purchase price; but varies per market. If you want your offer to be taken more seriously, putting more earnest money on the table shows you mean business.
-Create a custom personal letter to give to the sellers with your offer that tells a bit about your family and reasons why you would love to purchase their home.
Closing and Move In Day
-Make sure you review your closing documents BEFORE so that you know what you understand what you are signing.
-Contact the Title Company to see what documents you need to bring to the closing (ID, Passport, etc).
-Review your final-walkthrough checklist so that you ensure the sellers have taken care of everything that they promised.
-Have funds ready to be wired or write a check for the closing costs.
The time is finally here to get the keys to your home! Hooray! After all fees are paid, many papers are signed, and money is funded, you can officially get they keys and start moving in. Now its time to start decorating, buy furniture and make memories in your new home!
Contact Engel and Volkers Austin at (512) 328-3939 or come stop in and visit us at 3700 Bee Caves Road #102 Austin, TX 78746 to begin working with a Realtor!
