We have come a long way with our discussion on buying a home. We recently looked at how-to get a mortgage in 3 easy steps and how-to pick the right home for a first time home buyer. Today we will look at the 5 steps to buy a house a first time home buyer:
Step 1: Save up your money as a first time home buyer.
You need to get your finances together before you can apply for any first time home buyer program. A part of this process will require to find out where your credit score stands. Your credit score is extremely important here because it basically dictates your level of credit worthiness. To put it bluntly: poor credit score means you pay more money on interest.
If your credit score is poor or you don’t have enough money saved up you might have to take a step back and fix these issues. You can start by working to pay off your debt, save more money, and start making all of your payments on time. You need to get your finances up to par before you can continue on and look to buy a home. This includes an increase in savings and with your credit score.
Step 2: Get pre-approved for a mortgage so you can buy a house.
As a first time home buyer you need to apply for a mortgage and get pre-approved for a certain amount. This process will allow you to determine exactly how much house you can afford. A few other reasons you should get pre-approved for a mortgage before you get into any first time home buyer programs include:
- Save time. You will save time because your real estate agent will only show you homes that you can afford. You want fantasize about homes that are simply out of your price range (no matter how fun this is).
- A faster closing period. Sine your mortgage loan application has been basically processed you can experience the luxury of a faster closing period as a first time home buyer.
- Gain confidence. You will start to see homes that you can afford. The process of buying your first home will become more exciting for you.
Once you are pre-approved for a mortgage you will see exactly how much you can afford for a home and you can move on to the next phase.
Step 3: Find a reputable real estate agent.
You need to find a real estate agent that you trust. This is where you need to reach out to your network. Your friends and family should be able to point out a real estate agent that they worked with. Don’t settle for the first one either. This person will play a major role in your first time home purchase.
You must understand that agents usually work on commission, not salary. They are not public servants. If they don’t close the home they don’t get paid. It’s really that simple. Keep this in mind as you agent recommends homes for you. You should also ensure that your expectations are known. You want an agent that works for you and not against you.
Step 4: Figure out your housing needs.
What do you want and what do you need as a first time home buyer? You need to separate your wants and needs. You may need to live close to a school for your kids. You will want a swimming pool in the backyard. Your wants and needs should be established right off the bat so that you don’t waste your time looking at homes that are not right for you.
Step 5: Plan for first time home buyer fees.
As you look to buy your first home you need to become aware of the fees that will be hitting you in the near future. This is a topic that will be covered in greater detail soon. For now we just want you to understand that you will be hit with a plethora of fees as a first time home buyer. The only suggestion here is that you don’t get carried away and buy a home that barely fits in your amount that the mortgage loam was pre-approved for.
There we go. A comprehensive piece for all of the first time home buyers out there looking for the steps to buy a house. Did we miss anything?
(photo credit: svadilfari)