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  • Writer's pictureRebecca Richardson - Mortgage Consultant

Advice for First-Time Homebuyers

Buying a home is a dream for many individuals, but from the outside can look like a daunting process. As your trusted Mortgage Mentor, I’m here to tell you that it’s not as scary as you might think.

In the blog below, I’ll share the steps it takes to buy your first home, three things you can do to prepare to enter the housing market, and some tips to help you understand mortgage rates.

Steps to Buy a Home So, you want to buy a home but don’t know where to start. It can seem like staring into the abyss, but it’s actually simple as six steps.

  1. Research your budget. It’s important to know how you spend your money and what payment is comfortable. 

  2. Get pre-approved for a mortgage. This will give you a better idea of what you can afford and what type of loan you may qualify for.

  3. Find a real estate agent. A realtor can help guide you through the process and provide insider knowledge of the market. 

  4. Start looking at homes. You can start online, but it’s best to visit in person to get a better feel of the home and the neighborhood. 

  5. Make an offer. Once you find a home you like, make an offer and negotiate a deal you’re comfortable with. 

  6. Finalize the loan. Your mortgage will be approved, an appraisal of the home will be done to confirm value, and closing will occur which makes the home officially yours. 

Not so daunting, right? If you’re ready to take the first step, a member of my team will be more than happy to help you get a better sense of your budget and get you set up with a pre-approval. Three Things to Do as a First-Time Homebuyer Are you sick and tired of renting and want to buy your first home? You’ll be comforted to know that it’s getting easier for first-time homebuyers to access the life-changing benefits of homeownership. Below are three steps that you should take when buying your first home this year:

  1. Use a lower down payment. 20% isn’t needed and it’s far above the average typically used. Down payments can be as little as 0-5% depending on the loan program and by putting less down you have more set aside to make upgrades to the house, keep your emergency fund well stocked or invest it elsewhere.

  2. Know what’s comfortable for your budget. No one likes to be stressed about money so be sure to stick to your ideal monthly payment and sales price rather than the max you qualify for. 

  3. Ask the seller to cover some of your costs. I’m seeing sellers willing to pay buyers’ closing costs or even subsidize their mortgage payments for the first few years. This can save you thousands so be sure to discuss with your lender and Realtor what options you have.

Those three steps alone can make buying your first home much less daunting than it seems. If you’re ready to get started, I’m licensed in 25 states and have helped countless individuals guy their first home.

Understanding Mortgage Rates

One of the most confusing things for those unfamiliar with the housing market are mortgage rates. If you’ve watched or read anything in the news regarding the housing market in the last two years, it’s likely that you’ve heard a lot of panic about rising rates.

It’s important to note that there’s not just one mortgage rate. There are multiple factors that decide what rate individual buyers will receive.

Generally speaking, mortgage rates tend to rise when the economy is strong and fall when the economy is weak. Your credit score, loan type, and down payment amount can also affect your mortgage rate.

Think of it like a bullseye - the closer you are to the ‘ideal’ mortgage scenario, the lower your rate and closing costs will be. Lower credit scores, down payment, or certain loan types can move you outside of the center, causing the rate/fees to up.

You can move back towards the center by paying more in closing costs (or points, as they’re commonly referred) to buy down the rate, but that doesn’t make sense in every situation.

That’s why it’s important to work with a lender you trust to find the best option for you. If you have any questions or are ready to take your first step, contact my team; we are straight shooters and will always provide you advice that works best for your financial situation.

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