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first-time home buyer

First-time home buyer? Here’s where to start!

Being a first-time home buyer is often as overwhelming as it is exciting. While there’s so much to look forward to, it’s also easy to feel stressed about how much there is to do. In many cases, you might not even be sure where you should begin. The road to homeownership can be complex, but here are a few key tasks to accomplish early on for the best start!

Get your pre-approval

Getting pre-approved for a mortgage is something we recommend for every home buyer, and especially those entering the market for the first time. As you might already know, we are very passionate about emphasizing the importance of a pre-approval. If you’re a new buyer, however, you might not be super familiar with the term. When you get pre-approved, this means a lender has given you an estimate of the amount of mortgage you might qualify for. The reason it’s not a guarantee is because your pre-approval is merely based on your situation at that point in time. If your finances take a turn for the worse, lenders have no obligation to grant you a mortgage even if you’ve been pre-approved.

If a pre-approval doesn’t secure you a mortgage, what’s the point? As a first-time home buyer, a pre-approval can help you understand where you stand in the market. You will learn what you might be able to get in a mortgage, and what improvements you can make to your finances. Plus, a lender who has given you a pre-approval already has lots of your necessary information. If you end up applying for your mortgage with the same lender, the approval process can go faster.

Determine what you can afford 

Now, your pre-approval amount and the amount of home you can afford are sometimes two different things. For one thing, your finances might change after you are pre-approved. Plus, just because you can technically afford something, that doesn’t mean it’s the best choice for you. You should work with your pre-approval and your own knowledge of your income and employment to create a budget. Remember you will have to pay for closing costs and home maintenance on top of your actual mortgage payments. You will also need to save up for a down payment. A pre-approval is great, but it doesn’t take every factor into consideration. The important thing is to not go above your pre-approval!

Of course, finding the right budget as a first-time home buyer is challenging. The good news is there are professionals who can help! Both your real estate agent and your mortgage broker can offer assistance in creating a proper budget for your buying journey. We will go into more detail on these two roles later on.

Deal with your debts

If you’re dealing with debts, can you still buy a home? This is a common question, and the short answer is yes. However, you need to consider how your debts will affect your purchase. For example, the extent of your debts and credit score might impact the financing you can receive. If you have debts, but are reliably paying them off, a traditional mortgage may still be the best option. However, people who are struggling with debt sometimes need to turn to private lenders. You can read more about buying a home with debt here.

If you have debt concerns, you can consider paying off some debts before entering the market. The most important thing to remember is to not add onto your debts at this point! You should try to make your finances as steady as possible before buying a home. 

Research real estate agents

Using a real estate agent is fairly essential in today’s market. As a first-time home buyer, you will benefit greatly from this type of professional guidance and support. Your agent will help you find potential properties, arrange viewings, draw up offers, and negotiate on your behalf. They can also assist you in creating a realistic budget for your finances and your housing needs.

When you’re looking for the right real estate agent, you should focus on finding a professional who knows the housing market you’re in, and who has experience with first-time home buyers. Your agent should understand your needs and where you stand in the market in order to help you find the right property. Take some time to do research on local agents, and feel free to ask friends or family for any recommendations they might have. If you need some more guidance on finding the right agent, you can check that out here.

Contact a mortgage broker early

Finally, all home buyers should get a mortgage broker involved in their buying journey! If you’re a new buyer, it’s easy to feel lost and overwhelmed. A broker can keep you on track and be your top resource throughout the process. We can answer all your questions, help you budget properly, and walk you through the mortgage products available to you. When it comes time to secure your mortgage financing, we’ll be there to make things go smoothly. 

If you have any questions about your mortgage, give us a call at Centum Home Lenders! You can reach us at 506-854-6847, or get in touch with us here.