New Home Buyers: What to Expect When Making Your First Purchase

Written by  //  2015/09/28  //  Home Financing  //  No comments

If it’s your first time buying a home, you’re likely looking forward to the rest of your life. Full of hope and a little adventure, you decide to take the plunge to buy a home. This choice might teach you more than you ever thought you didn’t know. Don’t worry though—inexperience won’t cause your downfall if you’re careful in your preparation.

Learn about the costs, financial and otherwise. Any extra time you spend in preparation pays for itself later, when you’re able to avoid common pitfalls and unpleasant surprises. Below you’ll find three basic things to expect when you purchase your first home. 

1. There’s No “One Size Fits All” Mortgage

Mortgages vary based on several factors: your down payment amount, credit score and resulting interest rate, assets, and the amount you plan to borrow (Source: Sente Mortgage, a mortgage lender in Austin). Your entire financial history and current net worth are just two of many parts to the final cost equation.

But before you become nearly overwhelmed with all of the complexities, stop and take a breath. If you find a reliable mortgage lender, they’ll help you through each step of the process.

2. The Process Takes Time

From beginning to end, you participate in three basic parts to create and close on your first home’s mortgage. These parts consist of:

Pre-Qualification or Pre-Approval
Before you even think of listings and open houses, fill out a standard loan application. Your mortgage lender or provider will request initial documents regarding your income, assets, and employment situation. With this combined information, your lender then notifies you of an approximate amount you’re approved to borrow.

Home Search
As you create a pool of homes that interest you, stay in touch with your mortgage banker to ensure price approvals. Once you have a loose idea of 2-3 homes that present a viable option, you’ll begin to consider a chosen loan program, or mortgage type.

Contract-to-Close
In which you create a sales contract and review and sign the various legal disclosures. Upon receipt of these documents, your mortgage provider may need updated information on your original asset, income, and employment documents. Review, clarification, and the choice of an insurance provider all occur before you sign the final closing documents.

3. Costs Add Up

Expenses include more than just the principal (home price) and taxes. Closing costs alone include a list of itemized charges, so review all documents you receive to understand the basic costs. If you expect these costs in addition to insurance, utilities, and possible upgrades, the bottom line costs won’t come as a surprise to you or your wallet. Remember to also keep in mind potential repairs, and leave room in your budget for such expenses.

Mortgages are probably the most complex thing for anyone to understand when they go to buy a home. Always sit down with a professional. They will explain how the process works and what you can expect during the time it takes to get your loan approved. They will also tell you what will work best for you and for your current financial situation.

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