Looking to purchase your first home but don't know where to start? Take a look below! We'll go over 5 tips to help with the buying process if you're just starting out or have purchased before! With the ever changing market it's a great idea to consult a real estate professional. We'll go over how much money you need to save, what costs are involved when buying, closing timeframe, Negotiations and first time homebuyer programs.
1. How much money $ do you need to save?
Ideally you should save enough for your down payment, closing costs, inspection costs and regular homeowner maintenance. To include a savings for any unexpected homeowner necessities that could come up.
Down payment amounts will depend on your loan type. First time home buyers sometimes don't need any money down as a down payment or very low money down. Check out the HUD website for more info on these types of loans. FHA Loans
Your closing costs will vary greatly from lender to lender and loan type to loan type. It's a great idea to consult a local loan officer to go over any and all questions you may have & to see what loan program fits your needs the best.
2. Costs you incur to purchase a home
One of the biggest misconceptions out there is you need 20% down for a down payment. This is NOT true! Some buyers can get into a home with very very little down or no money down. FHA loans for first time home buyers can be 3.5% down and conventional loan first time home buyers (that qualify) can put as low as 3% down.
They're down payment assistance programs out that can eliminate your down payment or defer it to when you sell.
Some buyers will not bring any down payment to close! For VA loan buyers they typically are 0$ down payments!
Closing costs will vary from lender to loan type. Often times we can negotiate the seller to credit you for some of your closing costs (Case by case basis).
Home inspections will vary per home, but $5-600 is a good rough range for the following 4 inspections often times required.
1. Full Home inspection
2. WDO-wood destroying organism inspection
3. 4pt inspection
4. Wind mitigation
3. Closing Timeframes
You have found the home of your dreams! Now when can you move in?
Typically closings take 30 days from start to finish. So when we find the right home you can usually move in 30 days from then (closing will need to take place first).
Some closings take longer and others shorter, 30 days is a good range to base things off of.
You will be required to pay your first mortgage payment usually within 30-59 days after closing, talk to your loan officer to see when your first payment is due.
4. Negotiations
Need help with closing costs? Depending on the home and the situation we can always try negotiating a credit from the seller towards your closing costs, to reduce your cash out of pocket!
This is never a guarantee and will vary, but with the market shifting it is more likely to happen!
5. First Time Home buyer programs
Consulting with a loan officer professional, lender, bank etc they will run your credit, verify income, assets and your liabilities to calculate your pre approval amount for home purchasing! This part is crucial to establish your purchasing price budget! Often times they're first time home buyer programs to help with your down payment or closing costs and sometimes both! This can help save money out of pocket upfront. Some of these programs you are required to pay back at a later date and others you are not.
Bottom Line
The biggest thing to remember is knowledge on the buying process is going to help you tremendously! Reaching out to a real estate professional, loan officer, home inspector and all of your pertinent vendors is crucial!
I would be happy to consult with you on how to coordinate your next move and save you as much money as possible.
