What First-Time Home Buyers Need to Know

Currently, we are experiencing a buyers' market. This is a good time to be a first time home buyer as you can get more house in a better location for less money. In addition to that interest rates on mortgages are low. Still this is probably the biggest investment of your life and you don't want to make a mistake. It can take between 30 to 45 days for the entire purchase process, although timelines vary according to individual buyer and seller circumstances.

Pre-Qualify Before You Look

Most realtors will not show you homes unless you pre-qualify, so they know that you are serious about buying. Gather past 1040s, bank statements, credit account numbers and determine how much you have for a down payment. Your realtor can give you a ballpark figure for the type of mortgage you will qualify and can steer you to a mortgage broker. Once you get a pre-approval status from your lender of choice, they give you a Loan Status Report (LSR). You can then determine what price range of homes to consider. If your lender pre-qualifies you for monthly payments you are not comfortable with, buy under that amount. You are the one that has to make that payment each month.

Start Looking at Homes Available for Purchase

Many people begin their search on the internet. You can save a lot of time by doing some research. Some people like to drive through their preferred neighborhood to see what is available. Be careful of 'For Sale by Owner ' properties, many of these owners have unrealistic expectations of the value of their property. Once you have narrowed down your search, it is good to contact a realtor who can help you evaluate your choices and make an offer. They will know what comparable properties in the area have actually sold for, not just the list price.

Making an Offer

You submit a contract to the seller stating the amount you are offering along with the LSR so that they know you are serious. The seller may counter offer. Once both the buyer and seller accept the offer both sides are obligated to follow through. It is always contingent on the buyer getting their loan. Your realtor will monitor the process until closing.

Your Home Purchase Process Continues

You must put down earnest money and then begin the application for the loan. There will be a home inspection which can be paid for by either the buyer or seller depending upon the terms agreed upon. It is still possible to back out if the home inspection finds a problem that you and the seller can resolve. The lender requires an appraisal to make sure that the house has enough value to cover their loan should you default. Once the lender gives final loan approval, you are ready for closing.

Finally You "Close"on Your New Home

You will get to have a final walk through to make sure everything is the same. Then a title company prepares all the documents for the signing of both parties. The title company oversees all the document signing and delivers the title to you, the new owner. Move-in can be immediate or up 30 days depending on the agreed dates between buyer and seller.

Enjoy your new home!

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