Congratulations, you have made the decision to buy your first home!  It’s an exciting, fun journey, and a huge milestone in your life.  It can also be a little overwhelming at times.  You can alleviate some stress, and make the process much more enjoyable by taking some time to do a little research first.  Remember, this should be a fun process – enjoy it!

Finances

The best place to begin is to get your finances in order before you begin your search.  Know your numbers!  Your credit score is a huge factor when applying for a loan.  Take advantage of free credit reports and check your scores prior to applying.  You should also take the extra step to learn your FICO score.

Next, know your budget.  If you haven’t already done so, sit down and make a budget to determine how much money you have left at the end of the month.  Use this to help determine how much of a mortgage you can afford.  Fannie Mae recommends that home buyers do not spend more than 28% of their income on housing costs.  Factors that you will need to consider when determining your budget are down payment, property taxes, insurance, home improvements, maintenance, and closing costs.  In addition, if your down payment is less than 20%, you may have to pay for primary mortgage insurance (PMI).

Once you have a budget you feel comfortable with, it’s time to search for lenders.  Check around with different banks in your area to see who is offering the best interest rates.  Once you have narrowed down the financial institutions with the best rates, you will need to apply for a pre-approval.  Having a pre-approval will benefit you because you will know how much you are approved for, and you will be ready to make your offer when you find the perfect home.  In addition, having a pre-approval may give you bargaining power when submitting your offer.

House Hunting

You know your budget, and you have gotten your pre-approval – it’s time to house hunt!  Make a list of everything that is a “must have,” and a list of “would be nice”.  Things you might consider are the size of the home, number of bedrooms, number of baths, size/layout of the kitchen, yard size, and neighborhood.  Also, think about how you feel about renovations – do you want something move-in ready, or are you willing to put some elbow grease into it?  As you search homes, ask if it is okay to take photos to help you remember the houses you liked best.

You Found “The One”

You found the home that you can imagine living in.  When considering your offer, there are a few things to take into consideration.  Look at similar homes in the neighborhood that sold recently, and compare the sale price and amenities.  Look at the market as a whole and think about the fair market value.

Once you have an accepted offer, schedule an appointment with a reputable home inspector.  The inspector will look for serious problems, such as mold, poor insulation, or cracks in the foundation.  It is important to be aware of these issues before continuing on.  If issues arise, you may have to re-negotiate or abandon the offer.  If the house passes inspection, congratulations!  You’re on your way to closing.

Are you a first-time home buyer in Collin County?  The Fejeran Group can help you find the perfect home.

Sheila

972-948-0715