What Is the Process for First Time Home Buyers?

Buying a house for the first time is a huge deal. Many first-time homebuyers often rush into homeownership without thinking everything through. They think that homeownership is a sign of financial responsibility and adulthood. Owning a home, though, is a ton of work and a big commitment, rather than a guaranteed good investment.
 

The Steps to Buying Your First House

Owning a home can be a shrewd long-term move. First-time home buyers, however, need to know what they are getting into. At first, the process of buying a house might seem too complicated if you are a first-time homebuyer. Between credit scores, interest rates, down payments, mortgage rates, and property taxes, you can easily feel overwhelmed. Much is at stake when it comes to buying your first home.
 

Fortunately, if you familiarize yourself with what it takes to purchase your first home, you will be able to achieve your goal more easily. You may be worried about making a costly mistake if it is your first time navigating the real estate market. First-time home buyers, however, enjoy some advantages created to encourage new home buyers. For example, they can benefit from federally backed loans, tax breaks, and state programs.
 

The following steps will help you avoid common mistakes, navigate the process successfully, and save money.
 

Start Organizing the Down Payment

As a new entrant to the real estate market, you need to start by tackling the issue of the down payment. It is important to figure out your finances before making any large investment. You will need a mortgage, which will require you to have some down payment. Ideally, this down payment should be at least 20 percent of the property’s price.
 

If you do not have enough money for a down payment, you do not need to despair. A down payment for certain types of mortgages can be as low as five percent or 10 percent. Some can even be as low as zero percent, such as USDA loans and VA loans.
 

Check Your Credit Score

You need to understand that failing to pay off even a few credit cards can affect your credit score. As a person buying a home for the first time, you will need a good credit score. This score is a summary of your credit report. It outlines how well you pay off your student loans, credit cards, and other debts. Lenders will check your credit score to determine whether you are likely to pay your debts fully.
 

Get a Mortgage Pre-Approval

Before you go out and buy a home, you should seek a lender’s pre-approval for a home loan. This will involve meeting with a loan officer at different mortgage firms. Each lending company will analyze your financial background and use the information to determine whether you qualify for a home loan. The lender will also use the information to determine the size of your monthly payments.
 

Find a Good Real Estate Agent

As a first-time homebuyer, you need to work with a trustworthy real estate agent. A good agent will help you find the right house, explain to you the nuances of buying a home and negotiate the best deal. Since the seller pays for the sales commission, you will not have to pay for the agent’s services.
 

After doing all these things, you need to do the following:
 

• Go shopping for the right house.
   

• Get a home inspection.
   

• Make an offer.
   

• Get a home appraisal.
   

• Close the deal and move in.
   

This step-by-step guide should help put you on the right path to fulfilling your dream of owning your own home. At Team Prehoden, we delight in helping first-time home buyers find their dream homes. Our primary interest is your total satisfaction. To schedule an appointment or viewing, call us at 858-217-5400. You can also visit our offices in Encinitas, California.