Our team at Summit Mortgage Corporation prides our self on helping first time home buyers understand the home buying process.

Buying a home is usually the first significantly large purchase a first-time home buyer has made. Therefore, you shouldn’t be afraid to ask all of your questions and ask again until you’re comfortable with the answer.

Before you even think about whether you want a two- or three-bedroom, you need to figure out what you can actually afford. That means taking an inventory of your income, expenses, assets, savings, and debts. First-time buyers need to have the necessary liquidity for the down payment, have investigated and addressed any potential credit issues, and spoken to a mortgage company and obtained a pre-approval letter. Just like applying for a credit card, whether you qualify for a home loan depends on your financial history. Lenders like me will look at your pay stubs, employment forms, and tax returns going back two years, as well as your credit score to determine eligibility.

Once you find a home you love, the next step is to make an offer.  If you’re represented by a real estate agent, this is something they can assist you with. In their offer letters, many buyers focus on the deal they can get on the purchase price. But it’s also a clever idea to be clear on what concessions, if any, you plan to ask for.

For example, you may want to ask for seller assist which can help you pay your closing costs. If the seller agrees, that’ll affect how much money you’ll need to bring to the closing table. Asking about concessions before you have a contract in place can keep you from being caught off guard down the line.

Typically, when your offer is accepted, the seller expects you to pony up a deposit as a sign of good faith. This earnest money is usually around 3% to 5% of the purchase price, but the actual amount can vary depending on the type of loan.  FHA loans as an example require a less amount for a deposit because the loan will require a less amount for the loan.  Aside from knowing how much earnest money you’ll need, it’s also important to find out whether you can get your deposit back if the deal falls through. If you don’t include a clause in the contract stating that you have a set amount of time to retrieve your earnest money, you may forfeit the cash if you decide not to purchase the home.

Splurge for a home inspection! Spending even $500 can educate you about the house and help you decide if you really want to pay for necessary repairs. You can also leverage your offer depending on the results of the inspection report and make the seller financially responsible for all or some of the repairs.

Respond promptly to all requests for paperwork from your lender, your realtor, and your closing office; this will keep time on your side.

In your contract with the seller, known as the offer to purchase, there will be a deadline by which you must close on the home. If there are delays, and that time limit expires, you could easily lose the house. There's a lot to do between making the offer and closing the deal, so it's important not to drag your feet on any step.

Don't forget the end game of this entire process. When it's finished, you'll be the proud owner of your own home! Take a few minutes to stop and smell the roses. Buying your first home is a big deal! It won't be long until you're paying taxes, doing repairs and maintenance, and figuring out some of the more challenging aspects of home ownership.

If your looking to start this great adventure, please give me a local lender a call! 1-866-681-6372