BUILD YOUR TEAM
Hire an agent.
This is a major purchase and you want a professional guiding you through this process.
A real estate agent can often send you new listings prior to these homes officially hitting the market.
An agent can advise you on overpriced listings and help you properly negotiate the home price.
GET PRE-APPROVED WITH YOUR LOAN OFFICER
There is a big difference between being pre-qualified and being pre-approved.
Being pre-approved means a licensed loan officer has reviewed all of your financial information and has determined with you the price range in which you can afford and the amount they will lend you.
This is crucial. There is no need to waste time looking at homes you cannot afford to purchase.
This also give you the opportunity to shop interest rates to ensure you are getting the best deal.
THE DOWN PAYMENT - DO NOT DRAIN YOUR SAVINGS
Having 20% down payment is not required.
There are many programs where you can put down as little as 3.5%.
A common mistake a lot of first time homebuyers make is using all their savings on the down payment.
If you use all of your cash on hand for the down payment then you have no emergency savings to fall back on.
There are down payment assistance programs available that will allow you to receive a down payment assistance loan while keeping your money in savings. Ask your loan officer about the Chenoa Fund Program!
FOLLOW A ROADMAP TO SUCCESS
Do not make any large purchases.
For the 3-6 months prior to buying a home, do not make any large purchase. Your lender needs to see that you are reliable in order for you to get the best loan possible.
If you have amassed a large amount of credit card debt, furniture loans, incurred debt for appliances, or bought a car, this could significantly change your credit rating.
Be clear about the home AND neighborhood that meets your needs.
Finding the perfect home in a neighborhood you do not like is a recipe for disaster. Where the home is, is as important as the home itself.
Ask your real estate agent about the crime statistics and school ratings of any home you are interested in.
Visit the neighborhood often to get a true feel for it.
DO NOT MAKE PURCHASES BASED ON EMOTION
Buying a home must be a rational decision, not an emotional one.
This is one of the largest financial investments you will ever make.
Ignoring major issues with the home because you love the backyard is not going to yield long term happiness.
Speak with your real estate agent about your needs versus your wants and make a list.
- Be rational about your list and ensure any home you make an offer on has all of your “needs” met.
Stick to your budget – overpaying because you have fallen in love with a home will lead to unhappiness in the long term. Being able to comfortably afford your home must remain a top priority.
Download our Roadmap to Homeownership and keep it with you while you attend open houses and scheduled showings!
STAY THE COURSE
- Buying a home is a process that takes months – anticipate this and try not to be frustrated.
You will likely have several back and forth negotiations with the seller – this is very normal.
Remember to keep the end goal of being a homeowner in mind every step of the way!
ROADMAP TO HOMEOWNERSHIP
- Meet with your loan officer
- Review your credit report, income, expenses, and bank statements
- Determine source of down payment
- Chenoa Fund offers zero down programs for down payment assistance
- Determine how much home you can afford
- Pre-underwrite your loan for an approval
House Hunting with your real estate professional
- Discuss the type of home you would like, including style, size and location.
- Your agent will schedule showings for you to find the perfect home!
- Your agent will prepare a contract based on the price and terms you choose.
- Negotiations – it may take a few times of back and forth with the seller!
- Seller accepts your offer!
- Provide an earnest money deposit to your real estate professional
Finalize your loan
- Final underwriting – you may be asked to update your paystubs and bank statements for a final review.
- Appraisal and Inspection – you may be required to pay these fees up front. Your realtor will advise you.
- Final loan approval – Wahoo! You are almost finished!
- Both you and the seller will sign the final loan documents transferring ownership.
- The title company will draw all the necessary documents for signature.
- The title company will ensure the loan is properly funded and recorded with the county.
- Once the ownership transfer has been recorded and the loan has funded you can take possession of your new home!