Answers for First-Time Home Buyers

It’s time for first-time homebuyers to turn their dream into a reality and own their very own home. Most first-time buyers have the same questions, which is why I’ve put together this down-and-dirty answer guide for the most common questions home buyers have.

1. What kind of credit score do I need to have? Generally, 630 or above is what you’ll want to have. The better your score, the better the terms will be on your loan. Some lenders may give you wiggle room on this, but it all depends on the circumstances. A loan professional can help you navigate this as you go.
2. How much of a down payment is required? Some loans will let you in for as low as 3% – 5% of the home’s value, but I would consider 5% to be the floor. More is better, especially if your credit isn’t as optimal as you’d like it to be. Working with a loan officer will help. Now, if you can put 20% down, there are benefits. You will have a smaller monthly mortgage payment, lower interest rate, and you will not need private mortgage insurance.
3. What’s the first step to home buying? The next step is getting pre-approval for a mortgage. Don’t shop for a home until you know what you can afford. There’s no use in falling in love with a $300,000 home in your dream neighborhood if the banks will only write you a loan of $150,000.
4. How much do I have to pay my real estate agent? As a buyer, you don’t have to pay your real estate agent, the seller is responsible for listing fees. Don’t worry, your agent receives a portion of those fees for helping with the transaction.
5. Why should I use a real estate agent? Like a lawyer, doctor, or other professional hired to represent your interests, the agent will not only advise you about the transaction but will protect and facilitate the process.
6.  How long does it take to buy a house? After you find the home you want to buy, it generally takes between 30 and 45 days. However, the home search can take longer, so have a clear idea of what you’re looking for and able to afford. (Your agent can help you with this. Another reason to have one on your side!)

Jumping back to down payments, here is a list of a few tips that can help you conquer saving for a down payment:

• Find out where your money goes. Track each expenditure, no matter how small. Where are you spending cash?
• Setup a separate savings account. Don’t let your dream home money mingle with your regular checking or savings account. Have a different account with a “hands-off” attitude.
• Pretend you already have a house payment.  Once you determine the approximate amount of a new house payment, start making that payment now. Instead of paying the bank, pay your savings account.

Naturally, there’s more to buying a home, but this covers the essential introduction to the process. As your agent, I will walk you through the rest, guiding you along the way. When you’re ready to make a move, reach out to me:  928-830-6976