Getting started can feel like the hardest part! That's why I made this A to Z first time home buyer's timeline. It's designed to give you a general overview of the process so you can "dip your toe in the water". It also links out to all the resources you need like helpful videos and calculators that run all the numbers for you.
Although it's more fun to search for houses, you really need to talk to a loan officer first! Getting pre-approved first allows you to know exactly what price range you're going to be looking in.
Also, most real estate agents won't show you a home unless you're pre-approved first. They want to make sure you have the money to buy a house!
As with almost everything in real estate, it depends! Not a fun answer... I know. Usually, buying a house includes 2 things. Your down payment and closing costs. Your down payment can vary between 0% and 20% depending on the loan program you're wanting to use. I suggest you watch my loan requirements videos to see what loan works best for you.
Closing costs are all the costs involved in the buying process like a home inspection, appraisal, title search, taxes, home owner's insurance, and lender fees.
To estimate these fees, you can use my calculator here. For ultra-accurate numbers, you'll need to get pre-approved and look at home loan quotes that are tailored to your situation.
You know your budget best. So, you're the main person who can determine if a house payment is comfortable for you. Some people are comfortable spending a large percentage of their income on a home. Others would rather not.
You can use this calculator to explore different affordability theories on how much house you can afford so you can see what feels right to you.
Great loan officers have the "heart of a teacher" meaning that they're willing to explain things patiently to you. I don't think there is a list of questions that's quite as helpful as just asking anything you're curious about!
If there is something that is confusing or complex, ask for clarification. Through asking questions, you'll find if that real estate professional is the right person for you.
Real estate is complex! It involves confusing real estate law, title complexities, and a lot of requirements in getting the money for a house.
However, you don't have to be an expert to buy a home with confidence and ease. Your team of a loan officer and real estate agent will help guide you through the process!
An interest rate is the amount charged by a lender for you to get a loan. The higher the interest rate, the more interest you pay on a loan to borrow that money.
There are several loan options out there and it can be overwhelming to find the "right" one for you. First, your loan officer can help you explore several different loan options.
Also, you can learn about more loan options through my YouTube video and bring those up to your loan officer to see if they could be part of your home buying plan.
Lenders often don't like hearing that a buyer is shopping for a mortgage. It means they may not get your loan (which is how we make money, by helping you get a mortgage). But, I absolutely don't believe it's ethical to hide the fact that shopping for a mortgage is in your best interest.
Shopping for a loan.
Conventional loans only require a 3% down payment for first-time buyers. FHA requires 3.5%. USDA and VA loans allow 0% down. We can also help you explore down payment assistance options.
Biases are important — asking a loan officer "should I buy a house now" is almost always going to give you an answer with at least some bias.
That being said, I purchased my home in July of 2022 — the height of the housing market craziness. I believe the answer to when you should buy a home is more about if YOU are ready. Not the market.
No one can control the housing market. And no one can predict what will happen. Here are the 3 right conditions I believe you need to have to be ready to buy a house:
1. You plan to stay in the home for at least 5 years
2. You are financially comfortable with the monthly payment and up-front costs
3. You have at least 3 months of reserves in the bank
First, it's a good idea to get familiar with your credit score and see if there's any issues you may need to address on your credit report.
You can always reach out to use for help.
The minimum credit score for FHA, VA, and USDA is 500. And for Conventional loans it's 620.