How to buy your first home: Part 1

There are very few things in life that are more intimidating and cumbersome than buying your first home. Believe it our not, there is quite a steep learning curve when it comes to educating yourself about buying your first home. One must have some basic knowledge spread over several industries: Lending (Mortgage), real estate, inspection, appraisal, title, and insurance. This blog post aims to alleviate some of the misconception that first time homebuyers may have with regards to purchasing their first home. 

HOW TO BUY YOUR FIRST HOME: PART 1


When you start out with your decision to buy a home, one of the first things that you will have to do is to get your finances in order. Since this is likely to be the biggest monetary transaction of your life time, it's very likely that you will need to acquire a mortgage to pay for your property. Although this may seem like an obvious factor to most, many people just start sending their agent a list of potential homes without even considering this step. Often times, people want to go out and look at homes with their agent instead of focusing on their finances because looking at new homes can be fun, while dealing with your finances can be stressful.

The first step of this process would be to find a mortgage lender. One that is highly skilled, understands your unique financial situation, and is easy to work with. It is important to establish a good relationship with this person because you will be communicating with them extensively. Most real estate sales associates can offer contact information on a few lending companies. However, keep in mind that real estate sales associates are not compensated for these recommendations. Most of these recommendations are made out of good faith to help the transaction close on time. Closings which are delayed can be a nightmare for everyone involved in the transaction.

Here in Jupiter, most individuals tend to prefer to work with local mortgage lenders. Local mortgage lenders often offer a quicker closing due to being more accessible. There are several local lenders around here who have underwriters in their offices. Mortgage companies that operate on a larger scale can tend to be a nightmare to work with. This is due to one file passing through many people’s hands, which increases the chance of delay. It is very important to do your due diligence to find a lender with good reviews.

Reaching out to a mortgage lender can be a very intimidating process for first time home buyers, which causes the home buyer to put off this process until the last minute. However, there is no reason to be intimidated when reaching out to a mortgage lender. Mortgage lenders are there to help you and would love to assist you with the purchase of your first home.

Keep in mind that you are paying the mortgage lender for their services. This will be reflected in the closing fees, which will most likely be into the thousands. You are paying these fees to your mortgage company for generating a loan for you. It is important to work with a loan officer who you feel like deserves the money. As with anything, there are great loan officers out there as well as some terrible ones. It is important to work with a loan officer that you like because the loan officer that you choose can make or break your first home buying experience. 

The next step would be to determine a price range that you can afford. This is a very important step and this step should be accomplished before you even begin looking at homes online. It is crucial to determine how much financial burden you are willing to take on when buying your first home. Just because you are approved for a certain amount on your loan does not necessarily mean that this a good price range for you. Be sure to look at your finances to determine what your comfortable spending every month. If you have expensive hobbies that you like to do on your days off and you buy a house for the maximum amount that you were approved for, you’ll probably be short on cash every month when you want to do those extra things. This is what’s referred to as being “house poor”. You’ll have an amazing house, but you will be chained to it financially and will be unable to afford to do other things.

It is also important to keep your price range in mind when you begin to look at homes online. For example, if you’re approved for $500,000, but you begin by looking online at houses in the $750,000 range, you’re going to be disappointed when you start looking at houses in the $500,000 range. It is a widely held belief that every $10,000 increment in home prices has something different to offer. You can always work your way up to a higher price range in the future, but if this is your first home it is important to stick to what you can afford.

Once you have found a mortgage company that you wish to work with and you have determined what you can afford, remember to get a copy of your pre-approval letter and have it on hand while you navigate the entire process. This acts as proof that you’re a legitimate home buyer. As a real estate professional, I am always impressed when a buyer emails me their loan pre-approval letter at the beginning of the process. It shows me that they are serious about looking for a home, and it also helps to get the ball rolling more quickly for everyone involved.

When you have found a home that you wish to buy and are ready to put together a written offer, the pre-approval letter will need to accompany this offer. If you have not gone through the process of receiving a pre-approval letter, this could tie up the written offer, which could open the door to other offers being put on the table. It is a great idea to knock this step out upon meeting with your chosen mortgage lender.

 
Dylan Snyder is a seasoned real estate professional serving the Jupiter real estate market, Palm Beach real estate market, Palm Beach Gardens real estate market, North Palm Beach real estate market, and the surrouding Palm Beach County area. Along with being a top producer in Jupiter real estate, Dylan's professionalism and expertise in luxury and waterfront real estate sets him and his team of real estate experts apart from the competition. For more information on Jupiter and Palm Beach real estate for sale, contact Dylan at (561) 951-9301.

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