Tips for First-Time Home Buyers

Buying your first home is a big decision, but it’s also an exciting one. It’s a chance to put down roots, build equity, and create a space that’s uniquely yours. But before you start shopping for your dream home, there are a few things you need to do to make sure you’re ready as a first-time home buyer.

1. Get your finances in order

The first step to buying a home as a first-time home buyer is to get your finances in order. This means making sure you have a good credit score, a steady income, and enough money saved for a down payment. You should also get pre-approved for a mortgage so you know how much you can afford to spend. There are many first-time home buyer programs that can assist with lower rates, down payment assistance, and more.  Be sure to ask your loan officer what programs they can qualify you for.  Here is a list of some First-Time Home Buyer programs available from The Richard Woodward Team NEXA Mortgage.

You also need to ensure you have provided your lender with all your income and asset documents.  Not doing so could result in a last-minute denial because something didn’t quite fit into the approval box for the lender.  Here is a list you should have gathered to provide.

• Documents needed
  • Copies of pay stubs for each applicant, reflecting a minimum of 30 days of income
  • Names/addresses/phone numbers of employers for two years
  • W-2s for two years
  • One to two years of tax returns if you are self-employed
  • Bank statements and mutual fund statements for two months
  • If self-employed, year-to-date profit and loss statement, plus signed returns for last two years
  • Proof of pension income, if applicable
  • Social Security and Disability entitlement letters, if applicable
  • Dividend earnings statements and applicable balance statements
  • Child support or alimony payments (optional for you to disclose)- a copy of the divorce decree or court order
  • A state-issued photo ID
  • A copy of your social security card

Once you have secured your pre-approval letter, you are ready to go shopping.   We always provide our clients with up to 3 program options and a custom video walkthrough of those options.  You can get your own after your application is completed.   To request your custom presentation just complete this form. 

2. Start looking for homes

Once you’ve got your finances in order, it’s time to start looking for homes as a first-time home buyer. There are a few different ways to find homes for sale: you can work with a real estate agent, search online, or drive around your desired neighborhood and look for “for sale” signs.  We recommend using a Realtor to help you narrow your search and who will send you a customized list.  Just request a referral today in our chat feature. 

3. Make an offer

Once you’ve found a home you’re interested in as a first-time home buyer, it’s time to make an offer. Your real estate agent will help you negotiate the price and terms of the sale.

4. Go through the mortgage underwriting process

An appraiser will inspect your home and determine if a lender would take on the risk of lending you money.

The underwriter assists the mortgage lender in deciding whether you will get approved for your loan. He or she will work closely with you to ensure you have submitted all documentation. In the end, the underwriter will make sure you don’t take out a mortgage you can’t afford. If you don’t meet the criteria, the mortgage underwriter may deny your loan.

An underwriter can:

• Investigate your credit history. Underwriters will look at your credit score and your credit reports. They assess your credit score, and search for late payments, bankruptcies, and excessive credit.
• Order an appraisal. An appraisal will be ordered by your lender to verify that the offer for the property is comparable to the actual home’s value.
• Verify your employment. Your underwriter will request that you prove your income, employment, and other relevant information.
• Look at your debt-to-income ratio (DTI). Your DTI (debt-to-income ratio) is a percentage that tells lenders how much money and how much income you have. An underwriter reviews your debts to determine if they are comparable to your income. This will ensure that you have the sufficient cash flow to cover your mortgage payments, taxes, and insurance.
• Verify your downpayment and savings. To ensure that you have enough money to cover your closing costs, the underwriter will also check your savings accounts.

5. Close on the home

Once your offer is accepted, it’s time to close on the home. This is when you’ll sign all the paperwork and officially become a homeowner as a first-time home buyer.

6. Enjoy your new home!

After you close on the home, it’s time to start enjoying it! Move in your belongings, decorate, and start making memories. Buying a home is a big decision, but it’s also an exciting one. By following these steps, you can make the process as smooth and stress-free as possible as a first-time home buyer.**

Here are some additional tips for buying your first home as a first-time home buyer:

• Do your research. Before you start looking for homes as a first-time home buyer, it’s important to do your research. This means understanding the housing market in your area, knowing what you can afford, and figuring out what you’re looking for in a home.
• Get pre-approved for a mortgage. This will give you an idea of how much you can afford to spend on a home as a first-time home buyer.
• Work with a real estate agent. A real estate agent can help you find homes that meet your needs and budget as a first-time home buyer.
• Be prepared to compromise. It’s unlikely that you’ll find a home that meets all of your criteria as a first-time home buyer. Be prepared to compromise on some things in order to find the right home for you.
• Don’t be afraid to ask for help. Buying a home is a big decision, and there’s no shame in asking for help from friends, family, or professionals as a first-time home buyer.

As a first-time home buyer, you may be eligible for a number of programs and benefits that can help you finance your purchase. These programs can include down payment assistance, tax breaks, and government-backed mortgages. Be sure to do your research to find out what programs are available in your area and how you can qualify.