The Ultimate Guide to Buy Your First Home

Buying a home is a big decision. Along with a down payment, you also need to have enough money for closing costs, moving expenses, furniture, and appliances. First-time buyers can often feel overwhelmed by all of the different factors that go into buying a home. Luckily for you, this post has everything you need to know about buying your first home! It will teach you how to start saving up for your down payment, the steps in the mortgage process, what to expect when you’re looking at homes in person or online, and more. Check it out below! What to do before you start thinking about buying a homeIf you’ve been saving for a home, it’s time to start looking. You’ll want to start thinking about what type of home you want to buy and how much money you’ll need for the down payment, closing costs, moving expenses, furniture, and appliances. It’s also important to figure out how much house will cost in your desired neighborhood.Start by figuring out how much you should spend on your mortgage by using this calculator. This will give you an estimate of how much house you can afford at the current interest rates.Next, figure it out with these two guides which divide up the average home price into monthly payments:The mortgage processThe mortgage process is the most common financial agreement between a borrower and lender. It includes the loan origination, disbursement, amortization, payment processing, and servicing. To make mortgage process smoother, it is important to work with a Real Estate Agent and Lender with whom you feel comfortable. With so many options available today, it is always easy to find a comfortable real estate agent and lender. Typical mortgage process starts with a Universal Loan Application that is used by every lender. They run your credit and obtain credit scores from all three bureaus. They will calculate your total debt to income ratio and house debt to income ratio. They have guidelines to follow so they don’t allow folks to borrow too much. After this process you are given a approval on the loan. Some time they give conditional approval with some conditions to be met before full approval. After full approval, lender can fund the loan. It take 20 to 30 days minimum for a mortgage loan. Some lenders can do faster and some lenders take more time so it is best to keep close communication with real estate agent and loan officer so you don’t miss the closing deadline. Lenders fund the loan to Escrow company and Escrow company transfers that money to seller after closing. Escrow company ensures that all conditions are met before closing. Checking out homes in personWhen it comes to buying your first home, you need to know what you’re looking for and why. One of the best ways to get a feel for a house is to actually go inside and check it out in person. When you’re looking at homes, make sure you take the time to look around and see how the space could fit into your lifestyle. Ask yourself: Do I like the layout? Is there enough storage? Are there any areas that would be difficult to clean? Take note of the things that appeal to you and don’t forget about the things that could turn into problems down the line.It’s also important that you get a sense of the neighborhood when you walk through a potential property. You’ll want to know if this house will be located close enough to your work, school, or other places you spend a lot of time so that your commute won’t kill you every day. A lot of people think they only need one car per family–they couldn’t be more wrong! It’s always better to err on the side of caution when it comes to living space, so if there isn’t room for two cars in your driveway then maybe this isn’t where you should live.Checking out homes onlineThe first step to buying a home is looking for ones that you like. After all, this will be your home for the foreseeable future! You can start by checking out homes online. Websites like Zillow or Realtor.com give you access to the listings of homes in your area. From there, you can narrow down your search based on features like bedrooms and bathrooms, the number of floors, and more.One way to narrow down your search even more is by using filters that are based on what you’re looking for in a home. For example, if you’re looking for a brownstone with 3 bedrooms and 2 bathrooms, you can use filters to find exactly what you want!Financing your homeMost home owners buy first home or subsequent homes with some financing. One advantage of financing is that you get tax advantage for the interest you pay on the mortgage loan. These rules keep changing so please research for current incentives. At the time of writing, mortgage interest can be deducted up to certain limits set by IRS. Many banks, credit unions offer various loan options attractive to many sectors of buyers. They are called lenders. Mortgage Brokers work with many of these lenders and offer a competitive option to you. You can work with a mortgage broker to get a competitive rate. For the home purchase financing you should get 3 quotes so you can compare and choose the best one. Down PaymentThe first step in the process of buying a home is to save up for your down payment. A common misconception among first-time buyers is that they have to purchase their home with 20% down payment, but this isn’t always the case. There are many different options available when it comes to financing your home. You can opt for 4% to 20% or 25% down payment. Ideally your should make as much down payment to keep your debt low but lower down payment programs are created for folks to enable them to buy a home. There are many financing programs including 0 down payment, they are called down payment assistance programs. A licensed lender or a licensed mortgage broker is the best person/organization to ask for loan programs. There are pros and cons associated with every option. For example, using more down payment will result in less debt and more savings over time, but you will have less cash in hand after you pay high down payment. High down payment will also make you a strong buyer and it will keep you equity higher in the house. No matter what option you choose, make sure you understand the advantages and disadvantages before making any commitments!Closing costs Closing costs are fees that are charged to the buyer when the home is bought. They are usually between 1-5 percent of the price of the house and include things like title insurance, inspections, and appraisals. Some loan programs allow the closing costs or part of closing costs added to loan amount. Another idea is to ask seller credit for closing cost. Your Real Estate Agent can help you with writing an offer, asking seller credit for closing costs. A licensed mortgage broker or lender can give you good idea about a given house, you can base your approximate numbers around it. These number vary house to house (based on county/city), loan to loan, and services charged by different players like escrow company, HOA, Notary, Government Fees etc. When you ask the pre approval from a lender, ask for a full good faith estimate on a given house. Select a house so that lender can run numbers. Study each line item, ask real estate agent or lender about each line item. More knowledge you have, better deal you will get on your loan. This will also give you exact numbers on a given house, so you will have no surprise after you buy a home. Moving ExpensesMoving expenses can also add up! You’ll need to buy boxes and packing supplies, hire a moving company or rent a truck, and more. It’s smart to start saving up for these expenses now so you don’t have to worry about them later on.Furniture for your new homeOne of the most important things when you’re moving into a new home is furniture. You probably have some furniture from your old place, but if not, you’ll need to purchase some new pieces. But what type of furniture should you buy? There are many different options when it comes to furniture, but there are a few things that you should keep in mind when looking for your next big purchase:-Quality: You want to buy quality furniture that will last. The last thing you want is to buy a low-quality couch and have it break in a year or two-Style: You’ll want to consider the style of your new home and how the pieces will look in the space-Durability: Durability is an issue with any piece of furniture because they can be pretty expensive. Make sure that the materials used are high-quality and durableBelow, we’ll discuss some tips for buying quality furnishings for your new home!Appliances for your new home When you go to look at the house in person, make sure you bring your list with all of the major appliances that you want in your new home. If you’ve done any research on the area, like looking at schools or hospitals nearby, then take note of what houses are usually located in those areas. This is one of the most important decisions about your new home because there are many different brands that offer different features and prices. You don’t want to buy appliances that will end up breaking down after a few months. Check out reviews online and ask friends who have recently bought appliances for their advice.First things first – always get a dishwasher!You’re about to make a huge purchase. And you’ve heard that all the little things add up over time. So, take a look at your budget and see if it would be possible for you to put aside a small percentage each month for your closing costs. This way, when your house closes, you won’t have to worry about going back to work right away to come up with all the money. Also, check out our guide on how much house you can afford!Tips on picking the right appliances.One of the most exciting parts of buying your first home is picking out new appliances for your kitchen. But it can also be really overwhelming when you consider all of the different decisions you have to make. Which color should the fridge be? What size should it be? Do I need a separate freezer? Unfortunately, there are no easy answers to these questions. You’ll have to decide what’s best for your individual needs and lifestyle. To figure out which appliances are right for you, it can help to talk with friends who live in houses similar to yours, or search online for reviews on appliances that interest you. Once you know what features are important to you, start looking at websites like Home Depot or Lowe’s to find appliances that match your criteria. It’s important to check the dimensions before buying anything, so make sure your appliance will fit in your desired location!Our real state agents can explain you this process to you with further details. Call us or chat with us now to get more information!!