Are you ready to buy your first home and become a homeowner? Buying your first home can feel overwhelming if you don’t know where to start. As a mortgage lender, I’ve helped countless first-time buyers navigate the process, and I’m here to break it down into clear, manageable steps.
Create a Financial Plan to Buy Your First Home
The first step to buying your first home is understanding your finances. Take a close look at your income, savings, and monthly expenses to determine how much you can realistically afford to spend on your first home. Remember that the amount you’re approved to borrow is only part of the equation; you may decide based on your goals or other budgetary factors that your preferred monthly mortgage payment is different from what you’re approved to borrow.
Be sure to consider:
- Down Payment: Depending on the type of loan, this can range from 3% to 20% of the purchase price.
- Closing Costs: These typically amount to 2-5% of the home’s price.
- Monthly Payments: This includes your mortgage, property taxes, insurance, and HOA fees (if applicable).
There are many online mortgage calculators you can use to get a rough idea of your monthly payment based on different price points.
Gather Your Documents
Applying for a loan involves a lot of paperwork, but by gathering everything ahead of time it doesn’t have to be exhausting or tedious.
To apply for a mortgage, you’ll need to provide specific documents to verify your financial health. Start collecting the following:
- Pay stubs (last 30 days)
- Tax returns and W-2s (last two years)
- Bank statements (last two to three months)
- Proof of additional income (if applicable)
- Identification (e.g., driver’s license or passport)
Just having these documents ready will streamline the pre-approval and application process.
If you’re concerned about providing any of these documents, perhaps because you’re self employed or your W-2 does not fully reflect your finances, you might want to look into a bank statement loan.
Connect with a Loan Officer
One of the most important steps when buying your first home is connecting with a loan officer who can guide you through the mortgage process. This is who will help you understand your options, including different loan programs that may work for your unique financial situation.
Your loan officer will also help you get pre-approved for a mortgage, which is totally essential in the home buying process. A pre-approval gives you a clear picture of how much you can borrow and shows sellers you’re a serious buyer. Even if you’re not quite ready, your loan officer can provide tips to improve your financial standing, like building credit or saving for a larger down payment.
We have a team of experienced loan officers who know how to connect you with the right mortgage option for your unique needs. Whether a VA loan, FHA loan, conventional loan, or something else is going to be best for you, we have a team you can depend on to help you connect with the financing you need.
Find a Real Estate Agent
After you’re pre-approved for financing, you can begin the house hunting part of the journey. At this point, it’s time to find a knowledgeable real estate agent. A good agent will:
- Help you identify homes that fit your budget and lifestyle.
- Navigate local market trends.
- Negotiate on your behalf when you’re ready to make an offer.
- Guide you through inspections, appraisals, and other important steps.
We will work as a team with your agent to make sure your home purchase goes smoothly, so choose professionals who are communicative and experienced.
Officially Apply for the Loan
Once you’ve found the perfect home and your offer is accepted, you’ll need to officially apply for your mortgage. During this stage, we will:
- Order an appraisal to ensure the home’s value aligns with the purchase price.
- Verify all financial information you provided during pre-approval.
- Help you choose the best loan option for your needs.
Stay responsive during this process and avoid major financial changes (like taking out a new credit card or making large purchases), as this could affect your loan approval.
Our Jackie Barikhan says, “Buying your first home is an exciting journey, and with the right preparation and support, it can also be a smooth one. We’re ready to help you take that milestone step into homeownership.” Ready to learn more or apply for a loan? We can help answer your questions or get you started on the road to pre-approval. Contact us any time!
