First Time Buyers
Buying your first home is an exciting process! Clearly defining your priorities for what you want in a home determining your budget, and choosing an experienced Realtor are the first steps to take to ensure the process a great one.
That is why I’ve created a First Time Buyers Guide. My desire is to make the process of buying your first home…well, easy! I love working with first time buyers and have been for many years. In my opinion an educated buyer is a happy buyer. This makes for a positive home buying experience for everyone!
What do I want?
It is important that you have created a list of what you want in a home, and know what is right for your budget before you tour homes with your Realtor. It’s easy to find a dream house, but can you afford the payment?
Before you start looking it is necessary to meet with a mortgage banker to determine what is appropriate for your budget. He or she will walk you through the process of obtaining a Mortgage Pre-approval. While a pre-approval does not guarantee a mortgage loan it is a gauge for what you may be able to afford. Your Pre-approval letter will give you a home value range where you should focus your search. No time to visit the bank? No, problem – I work with several loan officers that offer an online pre-approval.
Determining where you want to live is the next step. This is where a Realtor is a great resource, helping you determine what you want in a community, commute times, good schools, recreation, and lifestyle amenities will narrow down your search to areas that will fit your needs and desires.
Good Credit is a BIG deal
Negative marks on your credit can present issues with buying a new home. Having good credit is important to secure a loan and buy a home. Higher credit scores can result in possible lower interest rates while bad credit can prevent you from buying. If you have experienced a few blemishes on your credit all is not lost. The first step you should take is to obtain a copy of your credit report. We recommend Credit Karma, because it is FREE. If you find errors on your report you can dispute them which could result in a higher score. If you lack credit you can apply for credit cards, but please use them wisely, paying on time will improve your credit profile. Credit Karma is a great resource and will make suggestions for how to dramatically improve your credit. We are in no way affiliated with Credit Karma, we just like to pass along resources we have found to be useful. Once approved for a loan - SEE 10 Commandments -
Preparing to Purchase
Educated buyers are savvy buyers! Be certain you understand your mortgage options. We can recommend loan officers that are experienced at educating first time buyers on the details of a loan. A good banker can save you time and more importantly…Money!
To streamline the process have your tax records, payroll stubs social security card and other important financial documents on hand when you meet with your banker. Remember they are ‘interviewing’ you for credit worthiness, but you too should interview them to see if they are customer service friendly and are patient and willing to answer ALL of your questions. If they can’t walk you through the process with care they don’t deserve your business. Shop around until you find the right fit.
The Home Sales Process
Once you’ve found a home and have been approved for a loan you are free to make an offer. When you have an accepted offer your work has not stopped. There are a series of events that are time sensitive and necessary for the full process to be completed.
1. Making an offer – if accepted move on to the next step. If not accepted, negotiations start.
2. Offer Accepted – Your contract will be sent to the title company and to your mortgage lender by your Realtor– both parties will begin the process to finalize your loan, open title and complete financing approval before closing.
3. Option fee & Earnest Money – Both fees are due to your Realtor in no more than 48 hours after a contract has been accepted/executed. They must be in separate cashier’s checks. No personal checks.
4. Option Period – depending on your contract you may choose to pay for an option period which allows you to ‘opt-out’ of the contract. Normally reasons to opt-out are due to inspections. Option fees are normally $10 per day not exceeding 10 days. But can vary based on your contract. At anytime during your Option Period you can cancel the contract but it must be in writing and must not be after 11:59pm the last date of the option period.
5. Home Inspections – Inspections are scheduled during the Option Period. It is not always necessary to get an inspection, but we ALWAYS recommend getting one for your peace of mind and protection. An inspection can vary in price from $250-$750+ depending on square footage. The buyer is responsible for scheduling and paying for the inspection. Your Realtor can provide you with a list of licensed inspectors. If the inspection report has negative items you can use this to re-negotiate your contract.
6. End of Option Period – You accept the property and u move forward with the contract. This time period does not require much of you. Your Realtor, Title Company, and Loan Officer work behind the scenes to make sure your loan closes on time. It is crucial however; that you send any requested documents to your loan officer without delay. Be advised they will ask for the same documents over and over, many times…it always happens, with every company. Don’t get frustrated by this just keep a folder in your email with the documents so you can re-send as necessary. Any delay could result in missing your closing date.
7. Appraisal – your bank will order an appraisal which normally takes place 2 weeks after your contract is accepted. Depending on the bank they may ask you to pay the appraisal fee upfront or they will add it to the closing costs. The appraisal tells the bank what the home is worth, or its appraised value. If the appraisal is short of the asking price (value) of the house you can try to re-negotiate the sales price. Keep in mind the sellers are not required to lower their price based on an appraisal.
8. Closing - Once your bank has secured the loan they will give you a “clear to close”. The mortgage company will transfer all of your loan documents to the title company. The Title Company prepares your paperwork for the title documents as well as your mortgage documents. Remember payment should be in the form of Cashier’s Check only. It is necessary to bring government issued photo ID to the closing.
Portfolio of Companies:
1001 Texas Ave. , Suite 1400 #195
Houston, TX 77002