FAQs For First-Time Home Buyer
First time home buyer? It’s a position every home buyer has been in. There’s no doubt it’s an exciting time, but it can also be accompanied by anxiety or confusion. There’s a lot of information to understand and even more decisions to be made when purchasing your first home! Below, find the answers to some frequently asked questions from first time home buyers.
Q: I’ve decided I want to buy a house. Where do I even begin?!
A: First things first, take a deep breath! Then, reach out to a few lenders to determine how much house you can afford. They will take you through the steps to prequalify you using basic financial information such as your income, credit report, bank statements, debts, and tax documents. Prequalifying allows you to understand what your top number is for purchasing a home. From there, you can play with the numbers (like down payment percentage or debt-to-income ratio) to get to your ideal monthly payment. Many people focus on the purchase price, but the monthly payment is usually the more important number to have in the back of your mind when starting the process, so you know what you’re comfortable paying. Then, it’s time to start shopping!
Q: I have a preapproval letter from my lender. Now what?
A: Now it’s time to reach out to a real estate agent. They’ll discuss what you’re looking for and begin to show you houses within your criteria and budget. They can advise you on pros and cons of houses, neighborhoods, and schools. Your real estate agent will take you on tours of homes and handle the paperwork for submitting an offer when you find the right house.
Q: I submitted an offer. Should I start packing?
A: In a perfect world, your first offer on your dream home would be immediately accepted, the title and inspection would come back completely clear, and you’d close on the house a week later. Sounds great right? Unfortunately, it’s not time to start decorating the house just yet. There is the chance that the seller chooses a different offer. Even if your offer is accepted, there are still many steps (and negotiations) to get to the closing table.
Q: How can I prepare myself for a future home purchase?
A: The most important thing you can do is to protect your financial future by making wise decisions now. Put aside money for a down payment, or research programs that allow you to put down less than the traditional 20%. Pay off debts and make sure you continue to make payments on your accounts on time to maintain or improve your credit. Keep an eye on the real estate market so when you enter as a buyer, you’ll have realistic expectations. There is almost always some compromise involved, so it can help to make a list of non-negotiables versus wants in the house.
Q: How can I protect myself as a first-time home buyer? The process seems intimidating!
A: It is, but you’ll get through it! Understand the steps of the process that occurs from the time your offer is accepted to the time that you get keys in hand. There is a lot that happens, from escrow accounts to inspections to title searches. Know that there will likely be some hiccups and make smart decisions to protect yourself from the ramifications. For example, consider investing in title insurance and don’t forego the inspection to entice a seller into accepting your offer. You never know what may pop up!
Being a first-time home buyer is like being on a roller coaster…there are ups and downs, but it also comes with the thrill of finally owning a home of your own. There is nothing like it! Ready to take the plunge? The experts at Clear Title are here to support you with escrow services, title searches, title insurance, and even closing services. Call one of our Northwest Florida offices today: