Taking the First Step for Buyers
Buying your first home can be scary. We see a lot of people who are first time home buyers and they typically have a lot of uncertainties, doubts, and questions. Buying a home is complicated enough but when you’ve never done it before, it’s even more intimidating! Don’t worry! We’re here to walk you through every step of the way!
Are you financially ready to buy a home? Here in Oklahoma, we are lucky that our cost of living is so affordable. However, there are a lot of payments relevant to home ownership that you may not have encountered as a renter. This may include additional utilities such as garbage pick-up and water. You will need to pay property taxes and insurance (although this is worked into your payment). Before you buy, it’s helpful to clear up any debts that you have and build up an emergency fund just in case.
Go shopping! Loan shopping, that is. Go to a lender or two…or five. Get pre-qualified by giving a lender some brief information about your employment and any debts you may be carrying. They will crunch those numbers and give you an idea of how much you can afford. Remember that your pre-approval amount is most likely the maximum amount you can borrow, not necessarily what you should to keep your payment in your budgeted amount! Check with our recommended lenders!
Start planning. Budget, budget, budget! When you talk with a lender, don’t be afraid to ask questions. Ask them what current interest rates you can qualify for and what loan option they think will be best for you. This is their job and they know how to help you figure out which payment plan will work best for your budget. You may also consider increasing your down payment amount. This may drastically change the amount that you pay monthly. Maybe you decide you want to put your home search on pause and save up a hefty down payment to build immediate equity and lower your monthly payment. Maybe you qualify for down payment assistance and want to go ahead and make your move. A good lender will help you determine what works best for you, your family, your lifestyle, and your budget!
Be realistic. While you may be approved for a higher loan amount than you thought you could qualify for, this doesn’t mean you should go for that maximum home price. A good rule of thumb is that your home should be no more than two and a half times your annual salary. If you get caught with a mortgage payment that is beyond what you can afford, you won’t be able to enjoy life in your new home! If you’re house-broke in your new home, it may not be a positive experience for you. Give yourself some allowance in your budget to meet your daily obligations and save for things you need.
Find a Realtor®. A good Realtor® like the hand-picked client advocates on our team can help you find areas with great value that meet your requirements such as a certain location, size, or style. Express to them what is important to you and it will become important to them as well. We are here to represent you and your best interests, always. Check out our team page to get to know us!
Find your new home. This is the fun part! Start touring homes with your Realtor® to see what’s available, where, and for how much. Once you’ve found a home that fits what you’re looking for and gives you that cozy “I’m home!” feeling, we will write an offer, negotiate terms, and hopefully get you under contract!
For your protection, get a home inspection. Once you and your Realtor® have found your dream home and gotten it under contract, we recommend that you have a thorough home inspection done. You will need to pay for this but a home inspection will teach you about the home and will make you aware of any problems the home may have. Additionally, with this professional proof of defects, a lower price may be negotiated or the Seller may address repairs prior to closing. Or, if you really want to, you can change your mind altogether. You may be out the cost of the inspection, but that’s a drop in the bucket compared to purchasing a home you aren’t satisfied with or that costs you more in repairs than you can afford. Check out our recommended home inspectors to find the right person to fit your expectations!
Work with your lender. Your Realtor® will send the contract to your lender so he or she can get started. They will begin asking you for all kinds of documentation from pay stubs, bank statements, past tax returns, and more. It’s important that you get these things to your lender as soon as possible to prevent a delay in our timeline.
Find your insurance provider. You will need to get insurance on your home and will most likely want to check rates to make sure you’re getting appropriate coverage for your home, personal property, auto, and anything else. Your lender will require that you have this all lined up prior to closing but you can always switch at a later date if you end up finding something cheaper or better coverage later. Check our recommended insurance providers for rates!
Closing time. The title company has gathered all necessary paperwork from both parties’ Realtors®, lenders, etc. to get everything legally and financially ready for the big day. You will bring a cashier’s check from your bank for the final amount your lender provides you, a photo I.D., and your signing hands! There will be plenty of things to sign but if you have questions about anything you’re signing, your Realtor® and the title company’s closer will be there with you to provide an explanation. Once you and the Seller are done signing, the bank will release the funds for your mortgage, you’ll get the keys, and you’ll move in!
Confused? There’s no such thing as a stupid question, especially when it’s a question about something as serious as home ownership. We’d love to make everything clear to you, contact us!