First Time Home Buyer
Tools and Resources for Home Buying Rookies
Here’s what we’ve got for you:
- No spin, 100% authentic and unbiased information regarding first time home buying
- Special guest ninjas from the credit, mortgage, personal finance and real estate industry
- Tools, guides, and resources to make your home buying experience a pleasant one
Read, Learn, Apply .
Learning about the home buying process? Start here.
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Buying your first home?
Purchasing your first home is scary. Learn from our mistakes!
The Home Buying Process is Confusing
Home ownership is the ultimate proof that young adults have successfully launched their grown-up selves. It proves beyond any doubt that you are a productive, income generating, fiscally-responsible member of society. Aside from meeting stringent bank requirements, you will have displayed the patience of a saint and the comprehension skills of a savant because these qualities are required to jump through all the hoops that make up the home buying process.
Why is the Home Buying Process so Complicated?
Any process that involves the cooperation of more than two parties can get complicated. When buying a home, the cast of characters includes you as a potential buyer, sellers, your real estate agent and seller’s real estate broker. The supporting cast consists of loan officers, appraisers, attorneys and inspectors of every persuasion while different contractors have walk-on parts at various stages of the process.
The paperwork involved is voluminous and actual house-hunting is a challenge even for the young and agile. Buying a first home is not for the faint-hearted and weak-willed.
Another reason justifying the convoluted process is the fact that real estate transactions involve very big numbers. Buying a house is the single largest financial commitment you will be making so far.
Stages in the Home Buying Process
Buying your first home requires planning and preparation. Anticipating the requirements and getting your ducks in a row will ease the stress and possibly accelerate the process to get you your house keys sooner.
Aspirational Shopping Stage
This document gathering stage is guided by three components: establishing creditworthiness, proving income level and assessing your disposable income available for housing expenses.
Request your credit reports and credit scores from all three reporting agencies. It makes good sense to rectify errors ahead of the loan officers’ scrutiny. Presumably, you have also been paying your fair share of taxes, so prepare to present at least three years of tax returns along with bank statements and pay slips. Getting these papers together will give you a clearer idea of how much house you can afford given your income andexpenses.
Now is a good time to start saving for your down payment. Consider other sources of cash, but note that you will be required to disclose all funding sources.
Meet the Bankers
Start shopping for a mortgage by meeting with bankers and getting pre-qualified and pre-approved for a home loan. Walking into a hot property with proof of pre-approval will be to your advantage unless cash buyers are circling the same property. Educate yourself on the types of mortgages and pay attention to market trends.
Gone House Hunting
As a first time home buyer, link up with real estate agents who farm your target neighborhood. Have a list of must-have features in hand as you inspect houses for sale. Make notes as you tour homes. Prepare a shortlist of possible properties, and revisit each one with a camera. These pictures will be helpful aids for deciding on the right house.
Everything is Negotiable
When it’s time to make an offer, use state-approved forms. The response could be an acceptance, a rejection or a counteroffer. Decide what your walk-away number should be and do not stray too far from this figure. There are always other houses coming down the pipeline.
If accepted, you will need a purchase contract, defining transaction terms and voidable clauses. Make sure to go over this contract with a real estate expert if not a lawyer. Appraisal and home inspections will have to be scheduled within the time frame stated in the contract.
Nitty-gritty of Home Ownership
The last few hurdles require the most effort, and attention to detail is a must: obtaining home insurance, finalizing loan approval and closing on the home.
Purchasing a home is not an easy endeavor. Just ask anyone who owns a home. Horror stories caused by poor planning, real estate agents being lazy, paperwork missing, low credit scores and difficulties closing are common.
You can make the leap from renter to homeowner with the right resources, a can-do attitude and a little help from your real estate ninjas.