Buying your first home can be an exciting yet intimidating experience. It’s a big investment and you want to make sure you’re making the right choices. As a first-time home buyer, you may not know where to start or what to expect. This blog post will guide you through the process and provide you with tips to make your journey to homeownership a successful one.

1. Determine your budget. Before you start looking at homes, you need to know how much you can afford. This means figuring out how much you can comfortably pay each month for your mortgage payment, including taxes and insurance. You should also consider any other expenses that come with homeownership, such as repairs and maintenance. Use the affordability calculator in our mobile app to get an estimate of how much house you can afford based on your income and expenses.
2. Pre-qualified and pre-approved.  Pre-qualification and pre-approval are two terms that are often used interchangeably, but they are not the same thing. It’s important to understand the difference between them so that you know what you’re getting when you approach a lender.
   • Pre-qualification is the first step in the mortgage process. It’s an estimate of how much you can borrow based on your income, assets, and debts. You provide some basic financial information to a lender, and they will give you an idea of how much they are willing to lend you. This is typically a quick and informal process, and may or may not require a credit check or verification of your financial information. Pre-qualification can be useful for giving you a general idea of what you can afford, but it is not a guarantee that you will be approved for a mortgage.
   • Pre-approval, on the other hand, is a more formal process that involves a credit check and verification of your financial information. You will need to provide documentation such as pay stubs, tax returns, and bank statements to a lender. They will use this information to determine how much they are willing to lend you and what interest rate you qualify for. Pre-approval is a more reliable estimate of how much you can afford, and it can be a useful tool for homebuyers who want to shop for homes with confidence. A pre-approval letter can also give you an advantage in a competitive housing market, as it shows sellers that you are a serious buyer who is ready to make an offer.
3. Choose a loan option.  There are many great first time home buyer loan options.  A conventional loan allows a first time home buyer to put as little as 3% down payment.  FHA allows for 3.5% down payment.  The USDA Rural Development loan allows for down payments as low as zero.  The VA home loan also allows for down payments as low as zero for qualifying Veterans.  Everyone’s situation is different, your lender will assist you in choosing the loan option that is right for you.  Visit our loan options page for more detailed information for each loan option.
4. Find a good real estate agent. A good real estate agent can be a valuable asset in your home buying journey. They can help you find properties that fit your budget and preferences, negotiate with sellers, and guide you through the paperwork and legal aspects of the process. Look for an agent with experience working with first-time home buyers.
5. Shop for homes. With your budget and pre-approval in hand, it’s time to start looking at homes. Your real estate agent will typically set you up on a home search so that you receive current and newly listed homes that meet your criteria.  Use online resources to search for properties, attend open houses and showings. Don’t be afraid to ask questions about the property and its history. Remember to be flexible and open-minded as your dream home may not be exactly what you initially envisioned.  Sometimes a renovation loan can assist with creating your dream home if you are having difficulty finding one that meets your criteria.  As you shop for homes, we will assist you with calculating your estimated out of pocket expenses and monthly payment, so you know the amount of money you will need at closing is comfortable for you.
6. Get a home inspection.  Once you have an accepted offer on a home, it’s important to have it inspected by a professional. This can reveal any potential issues with the property that could end up costing you money in repairs down the road. If any major issues are found, you may be able to negotiate with the seller to have them fixed or lower the sale price.  Remember, an appraisal is NOT a home inspection.
7. Mortgage process.  Once you have an accepted offer on a home and you are satisfied with the home inspection, the lender will begin processing your mortgage. This involves verifying your financial and employment information and reviewing your credit history. They will also order an appraisal to determine the value of the property you’re purchasing. Once the lender has all the necessary information, they will make a decision on whether to approve your mortgage.  A lot of this process can be completed upfront with the pre-approval step.  Most documents that need to be signed or provided to your lender during the mortgage process can be completed electronically, such as using our ProSnap app.
8. Close on your new home. Once you’ve found the perfect home and completed all the necessary steps, it’s time to close on your new home. This involves signing all the necessary paperwork and paying any down payment and closing costs. Congratulations, you are now a homeowner!

Buying your first home is an exciting and rewarding experience. With the right preparation and guidance, you can make the process smooth and successful. Remember to stay patient and flexible, and always seek the advice of professionals when needed.  Working with a knowledgeable lender and real estate agent can help you navigate the process and make informed decisions. Don’t be afraid to ask questions and seek advice when you need it.

Good luck on your journey to homeownership!