FIRST TIME HOME BUYERS
Buying your first home is a major decision. In many cases, a mortgage payment including property taxes and insurance but offset by tax savings generated by mortgage interest deductions (which constitute most of the payment in the early years of a mortgage) may be the same or only slightly more than monthly rent, but you will be building equity with each payment.
Often, the biggest hurdle in the first-time purchase is cash available for the down payment and your closing costs. But even this obstacle is not insurmountable. If you are a veteran, you may be able to obtain 100% financing through a VA loan and many lenders offer 95% financing based on your credit rating. If your income enables you to qualify for the necessary mortgage loan, you may be able to negotiate a contract in which the seller pays your purchase closing costs and adjusts the price upward so that you, in effect, finance your closing costs. But the loan appraisal will still need to support this higher value in order for the loan to close.
A good place to start the entire process is to visit with a local lender to "pre-qualify" and establish your maximum loan amount. This loan maximum, coupled with your available cash, will determine the price range in which you should look. The lender will also provide you with a list of items required to begin the loan application process. We can provide you with lender referrals if needed.
As a first-time buyer, professional real estate assistance is crucial. We will work for you as a "buyer's agent" in order to be your advocate in the transaction. In most cases, we will be paid out of the seller's commission paid at closing, so you will not pay extra to be represented us.
We will be able to help you evaluate the pros and cons of purchasing a single family home, condominium, or townhouse and what the various types of ownership mean to you. Other decisions can include; Should you buy a resale home or new construction? What kinds of inspections or warranties should you seek? When making an offer, how much below listing price should you offer? How does the price compare to similar homes on the market? Are you negotiating terms and other costs (home warranty, for example) as well as price? What do you do if inspections uncover needed repairs? Are there any factors related to the house or neighborhood which could create resale problems? What closing costs are considered typical? In what is usually an emotional decision, you need the counsel of a reputable, knowledgeable real estate professional who can help you buy wisely.
When shopping for a mortgage, look at the overall cost, not just the interest rate. Generally speaking, the higher the rate, the lower the number of points charged. Make sure you understand any hidden costs or special early payment penalties which could create problems for you. Look at different mortgage products, such as shorter-term fixed-rate loans or adjustable rate loans, but be sure you understand what your "worst case scenario" is if interest rates rise.
Once you have settled on a community and seen several homes, you will be ready to make an offer on a home you like. If you and the seller, with our negotiating assistance, come to terms and you execute a sales contract, you will then finalize your mortgage and move toward closing.