What First Time Home Buyers Need to Know
Let me guess. You’ve started the search for your first home online. You looked for listings in Seattle, Kirkland, Snohomish, Mill Creek, maybe even Bothell. It’s all a little overwhelming, but you’re determined that now is the time to finally buy your own home.
Before you make the first showing appointment, there are a few things you’ll need to do first.
Figure Out Your Money
How much money do you have in savings? How much house can you afford? Will you put three percent, five percent, or ten percent down? Yes, there are loans available that don’t require a 20 percent down payment. Have you thought about closing costs? You may find a mortgage that only wants three percent down and a seller that will cover some of the closing costs, but don’t count on that. Talk to a lender about loan options, and ask your agent about the current market and what closing costs may include.
If you really want to know how much house you can afford, talk to a lender and get pre-approved for a mortgage. This isn’t a guarantee of a loan, but a sign from that lender that you should be able to get a mortgage when you’re ready. It also tells you the maximum amount you can borrow based on your income so you’ll be dealing with real figures when you’re ready to look at available properties and make an offer.
Don’t Change Anything
From the moment you make an offer until the moment you sign paperwork at the closing table, do not make a single major change in your life. Don’t change jobs. Don’t buy a new car. Don’t get a new department store credit card, no matter how good of a discount they’re offering. When you take on new debt or you change where your income is generated during the home-buying process, you’ve slowed down the entire closing process. Your lender will have to reassess your ability to take on the mortgage, and you’ll have to be able to produce paycheck stubs for a specific period of time. The seller may not be willing to wait that long.
Love At First Sight Happens, But Avoid It
You’re going to see several homes, and one, maybe two will take your breath away. You’ll love this house so much you’ll imagine your grandchildren visiting you in it. Stop right there. As hard as it will be, you need to hold back the love fest until 1) your offer is accepted and 2) the home inspection comes back clean. Picking out paint colors and furniture is fun, but if this ends up not working out, your heart might get broken, making finding a home tougher and more stressful.
Be Prepared to Hand Over Some Cash
Whether it’s money to be held in escrow or the cost of the home inspection, it’s likely you’ll be writing a check or whipping out the credit card at some point during this process. Don’t be surprised when it happens, and don’t be afraid to ask your agent how much you can expect to pay out before the closing once your offer is accepted.
The entire buying process has several steps and can feel a bit complicated. If you come into it armed with good information and an agent willing to share their knowledge and answer your questions, you’ll make it to the closing table with a smile on your face and into the home of your dreams.
We are here to assist you in making your home ownership dreams come true. Let us know how we can help!