The Ultimate Guide for First-Time Home Buyers

By Mark Spain Real Estate

There’s a lot of anticipation that comes along with being a first-time home buyer. At this point, a home is likely your most significant investment to date, and with that comes a lot of excitement but a lot of responsibility. 

Because of the high financial stakes of buying a home, it’s essential for first-time home buyers to feel prepared when embarking on the home-buying process. Working with an industry expert like Mark Spain Real Estate allows you to feel comfortable in navigating the local real estate market and head straight toward your dream home. If this is your first time purchasing a home and you’re not sure where to begin, allow us to share our ultimate guide for first-time home buyers. 

The Ultimate Guide for First-Time Home Buyers

Assess Your Finances

As a first-time buyer, your finances lay the foundation for your house search. Various factors, including your credit, debt, down payment, and savings, all greatly influence your affordability as a buyer, mortgage options, scope of home options, and more. As you embark on your home search, evaluate the following financial responsibilities to set yourself up for success:

Credit

Credit scores can highly impact your mortgage loan. A higher credit score can ultimately grant you more favorable loan terms which in the long run could save you significant amounts of money over your mortgage payment period.

Debt-to-income ratio

Your debt-to-income ratio shows how much debt you owe relative to your income. Most mortgage lenders will determine the buyer’s DTI ratio when distributing loans. The higher your DTI ratio, the more likely you will have to pay a higher interest rate for your mortgage, as lenders will view you as a riskier borrower. 

Down Payment

When buying a home, you will pay a percentage of the home’s sale price upfront, otherwise known as a down payment. When assessing your finances, you’ll want to budget for a down payment that accommodates 3-20% of the property’s sale price. 

Savings

Lastly, you’ll want to assess your savings and ability to pay closing costs. Closing costs typically range from 2-5% of the home’s purchase price. In addition, you’ll want to account for your earnest money deposit, which you should get back after closing, as well as moving costs, repair fees, and an emergency fund. 

Get Pre-Approval for a Mortgage

Once you have your finances lined up, it’s time to get pre-approval for a mortgage. There are several types of mortgages, including fixed-rate and adjustable-rate, so you’ll want to begin by deciding which suits you. Then, you’ll also want to consider the term of your loan. Shorter-term loans will have lower interest rates but larger monthly payments. Meanwhile, a longer-term loan will have the opposite. So ultimately, it’s up to you whether you want to prioritize lower monthly costs or overall savings. 

Once you’ve decided on a mortgage, you’ll want to get rate quotes from a few lenders and compare. In general, you’ll want to pay the lowest interest rate possible to have less monthly spending overall. Once you’ve decided on a quote, you’ll be ready to get pre-approved for a mortgage. Doing so gives you a preliminary commitment from your lender to loan you a certain amount of money. In most cases, mortgage pre-approval is necessary for buying a home, as many sellers will only consider your offer if they know you have financial security. So, getting this squared away is essential before you dive deep into your home search. 

Hire a Real Estate Agent

For a first-time home buyer, the world of real estate can be overwhelming. However, with an experienced Mark Spain Real Estate agent, the home-buying process will seem less daunting. Our agents consistently help show you properties in your area that fit your budget, attend showings with you, submit offer letters on your behalf, guide you through the closing process, and more!

You can rest assured that we’ll pair you with an agent that will be familiar with your local housing market and can provide you with valuable insight about neighborhoods, schools, and other amenities. 

Shop for a Home

House hunting is often the most thrilling part of the home-buying process. To kick off your search, talk to your agent about your wants and needs so they can narrow down your scope of listings and show you homes that best match your requirements. Do you need a big backyard for your pet?

Are you looking for a home near your child’s school? There are several things to consider when buying your first home, and it’s best to nail down your non-negotiables before you start shopping. Then once you’ve determined what you want, you’ll begin surveying listings and attending showings to find the best home for you. 

Make an Offer and Negotiate

Once you’ve found the home of your dreams, it’s time to make an offer! If you live in a competitive real estate market, be prepared to make an offer quickly before another buyer beats you to it. Your offer should include an offer price, a deadline for the seller to respond, and any contract contingencies you would like to instate, like appraisal and home inspection clauses.

Once your agent presents the seller with the purchase agreement, your offer will be accepted, rejected, or countered with a different sales price. In a competitive market, be prepared for potential bidding wars with other buyers. In this case, you may consider including a letter to the seller on why you love the home and try your best to maximize your offer.

Go Through the Closing Process

While you may think the home-buying process ends with an accepted offer, there are many steps to follow. First things first – you’ll have to apply for your mortgage with your lender, receiving a loan estimate detailing your loan terms and estimated closing costs. During this time, you’ll also hire a home inspector to evaluate the property for any potential structural issues that could affect your sale. Assuming the inspection goes well, you’ll then move on to your final steps.

You’ll first need to plan your move by picking a move-in day, contacting service providers, and hiring moving trucks. Then, it’s time to close the deal. When attending your final closing, you’ll finalize the purchase contract and officially become a homeowner. Within 24 hours of your closing, you’ll do a final walkthrough of the property, and then you’re finally on to your next chapter!

How Mark Spain Real Estate Helps First-Time Home Buyers

Are you a first-time home buyer? The experts at Mark Spain Real Estate are here to help you through every step of the home-buying process. With decades of valuable industry experience, our team of trusted agents will ensure your house hunt is smooth and stress-free! For sellers looking to streamline their home sale, check out our Guaranteed Offer Program to receive an offer on your home in only 21 days. Contact our agents today!

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