A First Time Buyers Guide to Home Ownership

Today’s market has put many in an “urge to buy” kind of mood. Understandably so. It is definitely a buyer’s market with low interest rates, and the price of homes at an all time low. If you're wise you’ll want to buy now too.

Since the demand for buying is high, we thought we would take the time to offer a little advice on how to navigate the process successfully.

First! Review your budget and financial status along with your credit report which are all indicators of your ability to obtain a mortgage as well as how much you can borrow. Consult your mortgage broker or lender to obtain a Good Faith Estimate. We recommend that you interview several mortgage brokers and lenders to make an informed decision on who would best supply your financing needs. Assess whether you have enough money for an appraisal, down payment, closing costs, home inspection (optional but recommended), and homeowners insurance. These are all costs associated with buying a home.

Next assess what your requirements are for a home. Everything from the number of bedrooms and bathrooms to the preferred neighborhood, style of home (ranch, colonial, bungalow) and any other amenities and features that are important to you. This will be absolutely necessary to achieve the maximum service of your real estate agent.

Finally, hire a real estate professional who will not only be diligent in helping you find your new home but will also work hard on your behalf. One who will understand your needs completely and is willing and capable of negotiating the deal. This could take some worthwhile time and effort.

This pretty much summarizes the to do list for buying a home. However, we also felt it essential to mention a couple of things that should not be done when buying a new home.

Prior to closing, most mortgage companies will make certain that you can still afford to buy the home. They will often re-check your most current employment status and credit report. So please! please! Be aware that changing jobs at this point could delay the process. Also do not make significant credit purchases that will increase your debt to income ratio which will then lower your credit score. Too often we have had clients who were qualified for a mortgage, and preparing to purchase the home of their dreams, only to delay or even stop the process because of a significant purchase they made that immediately showed up on their credit report, such as a car!

Another piece of advice we must offer is that you continue to pay all creditors on time. We have also had clients who decided to delay or discontinue paying creditors in an attempt to save more money for the purchase of their new home. Neglecting to pay or slow pay can still have a negative effect during this process and “break the deal”.

Keep in mind that there is much to consider when purchasing a new home. Therefore take the time to consult the professionals and become thoroughly educated about every aspect of this process for your greater satisfaction and success in buying that first home.