Buying your first home can be a long journey, and there are numerous steps throughout the process. Want to ensure you’re prepared? Check out this overview of what’s involved in the process.
First, you need to decide if homeownership is right for you right now. Generally, that means looking at your life and determining if you’re ready to stay in the same home for at least five years, but preparing should also include budgeting. You need to ensure you can afford your mortgage payments as well as property taxes and upkeep costs.
Mortgages aren’t a one-size-fits-all product. Instead, there are a wide range of different mortgages to meet a variety of different needs. Mortgages can range from 15 to 30-year terms, and they can have fixed or adjustable interest rates. There are also special mortgage programs such as FHA and VA mortgages which have low interest rates and low down payment requirements. Before taking out a mortgage you should research all the possible options.
Once you narrow in on the right mortgage option, it’s time to get pre-approved for buying your first home. When you are pre-approved for a mortgage, you know how much you can afford to spend, and that makes it easier to look for your first home.
When buying your first home, a real estate agent can be essential. They know the local market and can help you find a home that meets your needs. Real estate agents can work with your budget, and they can also help you hone in on the amenities that you need near your home.
The right home has the space and features you need. It’s also in a neighborhood that appeals to you. Depending on your long term goals, you may want to find a home in a neighborhood that can grow with you, or you may want to choose a starter home to live in for a few years before you upgrade to something larger.
Once you find a home, you have to put in an offer. A real estate agent is essential for this process because they can help you determine how much to offer. In competitive markets, offers usually need to be above asking price, and in buyer’s markets, you can often offer a bit less than the asking price.
Before you close on the home and finalize the deal, you need to make sure you’re making the right decision, and at this point, that basically means inspecting the goods. Ideally, you should have the home inspected to ensure you don’t face any unexpected repair issues. Then, most banks require an appraisal so they don’t inadvertently lend you more than the home is worth.
During closing, you do a final walk through the home, and you and the seller sign the documents. In most cases, you have to pay closing costs which include down payments, third-party fees, and HOA dues.
Once you’ve completed buying your first home, you need to stay on top of your mortgage. That means making monthly payments and putting money in savings to cover unexpected repair issues. You may even want to make extra payments so you can pay off the loan sooner.
To get help with buying your first home, apply for a mortgage with us. At BrightPath, we are committed to helping you succeed. Contact us for more information today.