Friday, June 5, 2015

8 Steps To Buying Your First Home

Step One

Buying your first home can be a daunting task when you're unsure of the process. There is A LOT of information online, some good, some not so good, and it can be really difficult to know where to start. I believe that when it comes to making the biggest purchase of your life, you deserve to have all the information, no strings attached. Over the next 8 weeks I will be giving you the most detailed information I can manage on home buying, from beginning to end. 

As always, I welcome any and all questions and comments. Helping people out is why I got into this business, so please take advantage!

So let's jump right in here with Step One to buying a home:

Decide To Buy A House

This may seem silly, obviously if you're here you've decided to buy a home, right? Not always. More often than not people WANT to buy a house, but they haven't actually made the decision to really go through with it. This can be frustrating and time consuming for everyone involved. 

Conquer Your Fears

Fear is the main reason most people don't make the leap from paying rent to paying a mortgage. There are many, many fears that first time home buyers may have, and while some are quite valid, most are often based on misconceptions or misinformation. 

1. You Can't Afford a Mortgage. 

Odds are if you can afford rent on your own place you can afford a mortgage. There is a big misconception that paying a mortgage will be thousands more a month than your current rent, and it usually stems from people using online mortgage calculators on homes that are way out of their price range. 

Ease The Fear: Find a lender you trust and get pre-qualified. Pre-qualification is quick and simple and can be done over the phone. It involves giving your lender an overview of your financial situation, including your income, debts, and assets. With this information your lender can give you a rough estimate of how much house you can afford. This step does not include a credit check, that will be included in the next step, which is pre-approval. Pre-approval is much more in depth and generally cannot be completed over the phone, but it will give you a more accurate amount you can afford. It is not absolutely necessary to get pre-qualified before you get pre-approved, but a lot of first time buyers feel more comfortable using it as a first step. 

2. It's The Wrong Time To Buy.

"My Neighbor said it's a sellers market." And "There aren't any homes for sale in the winter." Are two sentences I hear way too often from first time home buyers. While there is some truth to these statements, the bottom line is it's never the wrong time to buy the right house.

Ease The Fear: Contact a buyer's agent and find out what's on the market. A seller's market does not necessarily mean every house will be out of your spending bracket, and there won't necessarily be a bidding war, because it all boils down to what you're looking for. Are you looking for a home you can fix up? There may be a cute little house being overlooked by other buyers that is just perfect for you. Need to move in the winter? This could be a huge advantage to you if you happen to find what you're looking for. Although it's true there aren't as many homes on the market in the winter, you only need to find one that suits you, and odds are you won't have too much competition. The point is, there's never harm in looking. Maybe you won't find what you're looking for, or maybe you'll be pleasantly surprised, it's always worth a shot. 

3. You Don't Have a Big Enough Down Payment.

A lot of people still believe they $10,000+ before they can even think about starting a home search. Sometimes, depending on your situation, that may be true. But more often than not this is not the case for first time home buyers.

Ease The Fear: Again, speak to your lender. There are many programs and options available to home buyers, and some specifically for first time home buyers, that will significantly lower the amount of down payment you may need. If you have to, talk to a couple different lenders, shop around, exhaust all your options to ensure you get the best deal out there. 

4. You Don't Have Perfect Credit.

OK, this is a valid fear. A bad credit score can hold you back from a lot of things, but not necessarily from home ownership. Minor glitches on credit reports are common, because hey, life happens right? Don't let it discourage you, there may be a solution.

Ease The Fear: Lender to the rescue once again! During the pre-approval process your lender will go over your credit score and discuss with you whether or not it needs to be improved. Sometimes you only need to gain a point or two, and your lender may offer a few simple ways to do that. If your credit is quite low, speak to a financial adviser about your situation. A financial adviser can help you lower your debt quicker, teach you how to save more effectively, and ultimately raise your credit score. 

5. The Process Of Buying a Home Is Too Complicated.

Buying a home is only complicated if you don't have the correct information. Actually, the home buying process can be a lot of fun and really exciting, if you have the right guidance. 

Ease The Fear: Reading this blog post is a good first step. Put your trust in knowledgeable professionals, they're they to guide you and ease the stress. If at any time you feel more stressed or pressured by a professional you're working with don't be afraid to break off that relationship and find someone new. 

Next week I'll tell you exactly how to find an choose an agent, which questions you should be asking them, and what that agents main roles will be in your home buying  process.

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