If you are considering making your first home purchase, congratulations! I promise you will be in good hands. Buying a home can be exciting, full of anxious moments, and satisfying! When you work with our team, we will be alongside you every step of the way!
Although the process is very similar to the buyer process, there are a few additional things to consider:
- Financing is step 1. If you have not yet met with a lender, we have some great lenders who are accustomed to working with first time homebuyers and can provide you with lending programs that will suit your needs.
- Banks and lenders have different products. I always encourage buyers to talk with at least two different lenders to see what loan package is better for you. There may be a slight difference in interest rates or fees paid which could equate to thousands of dollars difference over the life of the loan. Good to shop around and talk to a few different people. Different situations can be addressed by different lenders.
- If your lender gives you advice, follow it. This is the time to be slow and steady when it comes to your finances. Don’t buy anything out of the ordinary, don’t move money from one account to another, and don’t pay off any debts or close any credit cards without speaking with your lender.
- Determine your down payment source. If your down payment is coming from another account or as a gift, discuss this with your lender so you can fill out the appropriate documentation and have the funds in place to close.
- There are a lot of details. Stick with it! As a first time homebuyer, it may feel like you have a lot of hoops to jump through, but it is worth it! Consider that according to the National Association of REALTORS®, homeowners in 2013 had a net worth 36 times that of renters. Your patience will pay off! Here is an example:
If you rent:
|Monthly Rent*||Yearly Rent Paid||Equity|
* Increases 5% per year
Where did your rent ($66,324) go? To your landlord!
If You Own:
After five years, you may see $82,906 in equity if you purchase (plus received possible tax benefits), but when you rent, you will have poured $66,324 into your landlord’s pocket!
* Includes Principal and Interest only on a 4.00% mortgage with 20% down with a purchase price of $150,000
** Appreciation rate estimated at 5% annually on a $150,000 home
*** Based on the declining principal balance
**** Difference between what you owe and the possible market value of the example home based on 5% annual appreciation.