What You Need To Know When Buying a Home

  1. Meet with a lender. Shop around for a lender who will offer the best rates for you and the right loan product. Don’t shy away from local mortgage brokerages and always opt for a big name. Small loan brokers have a lot to offer in the way of customer service and well-established relationships. Your lender will essentially define what price point or price range you’ll be able to afford, which is essential in deciding whether it’s the right time for you to buy. If your price point is lower than you hoped for and won’t be enough for the home that you want to buy, then you’ll have to decide whether to wait and save or lower your expectations for your first home.  Your lender will help you go through the loan products to find the ones you not only qualify for but are suited to your personal budgetary needs based on mortgage payment amount and down payment. For instance, traditional loans require buyers to put 20% of the purchase price down whereas FHA loans can be as low as 3.5%.

  2. Make sure your funds are seasoned. For example, if part of your down payment or all of it is a gift from your parents or a relative, certain loans will require those funds to be in your bank account for a certain amount of time–another good reason to speak with a lender. If you know a relative wants to help, it’s good to keep this person abreast of your plans.

  3. Connect with your realtor. You want a realtor you trust and you can personally connect with as well as someone who is professional and knowledgeable about the area you want to live in. Your realtor is going to negotiate on your behalf as well as explain things throughout the process, which is why you want to feel as though you can openly communicate with them and vice versa.

  4. Know your neighborhood. Now that you know your price range and you have a realtor, you want to know what areas you want to look in. Don’t leave this up to the realtor because it is you who will be living there, and some neighborhoods may not support your lifestyle.

  5. Manage your expectations. Make two lists to give your realtor: one of your deal-breakers, the things you must have in a house or neighborhood, and another list of things that would be nice. This is an exercise in reality not dreams. Be honest with yourself about what you need and want and communicate that with your realtor so you get what you want. Go a step further and ask your realtor to set you up on an automatic search based on your criteria so that you can let your realtor know which houses you’d like to view.