Long before my wife and I became debt free, we put a plan in place. That plan consisted of several things, one of which was buying our first house. Learn more about owning a home at our free-first time homebuyers’ seminar on May 15 from 5 - 7 pm and on May 18 from 10 am – 12 pm.
Friends of ChoiceOne Bank, from left-to-right, Corinthia, Anthony, and Chris Sain.
Owning a home was important to us for a lot of reasons. Whenever we embark on anything, whether together or separately, we like to do it right.
For us, doing it right meant putting some money aside as a down payment to purchase our first house.
Here are 8 tips for first-time homebuyers to help with your mortgage process and closing costs:
- Save a minimum of $5,000 - $10,000 or 20% of your income for 12 months before buying. My wife and I are firm believers in giving our money a purpose. In our case we both have full-time professional jobs.
We made it a point to each save $1,000 per month for a minimum of six months. This helped us go into our home buying situation with cash on hand to help offset the total cost of our home.
- Get Preapproved for a mortgage. My wife and I had a son that was beginning the 9th grade at the time we purchased our home. For us the neighborhood and school district in which we purchased our home was important.
Once we found a school we then looked at homes in the surrounding area until we identified a home we liked. The great thing about ChoiceOne Bank is that the approval process only takes 20 minutes. Their process gives you the ability to act quickly and it lets you and your real estate agent know how much you can afford.
- Find a Real Estate Agent you can trust and that knows your market. For us this was huge. We vetted a couple and ultimately chose an agent that was referred to us. This turned out to be great for us because she knew the area extremely well because she grew up in the area.
Make sure the Real Estate Agent you select understands your needs. Make sure they are professional, prompt and not just in it for the commission. Truly make sure they have your best interest in mind and that they communicate clearly and in a timely fashion.
- Choose a home that’s within your budget. Purchasing a home will be one of the biggest decisions of your life. Do your best to ensure that your first home meets your basic requirements. If you desire a two car garage, 3 bedrooms and two full bathrooms, seek that. But find those personal wants within a budget you can afford.
No need to be “house-broke” on your first home. Consider it as part of your five-year plan. Make sure for the time being that your home fits your lifestyle and family needs. You don’t have to love it but make sure you “Like it a lot.”
- Consider all cost and fees associated with buying your first home, then compare. It’s no secret that banks will charge a lower rate but have a higher closing cost. Therefore, it’s important that when shopping for a mortgage you compare costs and add up all the fees.
The beauty about ChoiceOne Bank is that, there is one flat fee and compared to other banks, it’s very competitive. Checkout home mortgage rates here https://www.choiceone.com/personal/borrowing/home-mortgage/
- How fast can we close on our house? It is very important but often overlooked in the home buying process. Closing matters. How fast you close matters even more at times.
Often times sellers want to close fast because they need to move as well. At ChoiceOne Bank, you can typically close within 28 days. Of course there are instances and unique circumstances where this might be a lot quicker or a bit longer but having your documents ready is key.
- Gather all necessary documentation. One part of the home buying process to prepare for is all the documents you will be required to gather. Yes, it is very tedious but it is necessary.
New first-time homebuyers will attest that this part of the process is the difference between if your experience was smooth or not. The main thing banks are trying to determine at this point is whether you can afford to make monthly payments on the home you want to buy.
- Pause all other financial decisions and actions. Brace yourself. Your credit score will take a hit whether you like it or not. Why? Because once you apply for a mortgage, your credit report will be pulled and everything you do going forward will reflect on this report.
So, during the home buying process, it is best you do not apply for a new credit card or another loan of any sort. During this time and leading up to the purchase of your first home, make sure all payments are made on time. These small things can have a huge impact on the process if you do something that changes your credit report.
These are my 8 tips for first-time home buyers to consider when you find the home you’ve always wanted. The most important thing to do is prepare yourself for the journey. Begin with my first tip and you will change how the entire process goes.
Be smart, save what you can afford to without hindering other areas of your life. If you can’t save $1,000 a month, do at least $250 or $500 for example. The point is to save something towards your first purchase.
Learn more about owning a home at our free-first time homebuyers’ seminar on May 15 from 5 - 7 pm and on May 18 from 10 am – 12 pm. Are you dreaming about owning a home?