For first-time homebuyers, purchasing a home is not only a dream come true but a massive investment too. It is therefore natural that there will be many concerns and hurdles to cross and involves various steps that can be quite complex for a common person.
While challenges are likely and might pop up as hurdles thereby making the purchase complicated, there are solutions to them too. One of them is learning about the home-buying and financing process so that you are not caught unawares while navigating your dream project.
Important Stages of the Homebuying Process
It is necessary to get an idea of the homebuying project as it will help you understand the issues you are likely to face when you start this process.
Buying a home brings several benefits to the table. As the years go by and you make payments on your mortgage, you will be building up equity in your house. This means that over time, you start owning more and more of the real estate till the time you pay off the mortgage and the house is yours.
The first step in homebuying, and this can be tricky, is to qualify for a mortgage. A lender will first evaluate your loan repayment capacity to pay back the loan in monthly installments. This involves having your credit history scrutinized and checking the quantum of your savings to know the amount of down payment you can afford.
These two factors are critical for a lender to understand how much loan you will receive and the approximate price of a home you can afford.
Once these calculations are done, you will be offered financing options. Here, you must go through the fine print of each of them and select one that best meets your needs and affordability. After you are done with the selection, tell the lender to hold the terms and lock this financing option.
What this means is that the interest rate on the loan will not change for a specified time. This is the time that you get to find a home that best matches your requirements and move forward with the purchase.
As you can see, as a first-time homebuyer, the whole process can turn out to be quicksand for you. It is thus advisable to go through a reputed real estate agent who will handhold you through the deal. We at Just Livin Realty have experts on our panel who are professionally trained to guide you through the whole process, from the time you decide to go house hunting till you get the keys to your coveted home.
Apart from the mortgage approval stage, we will take care of the house-hunting process too. This involves discussing your needs, choosing the preferred location, and getting a house that meets all these parameters.
Hurdles for First-Time Home Buyers
There are several difficulties that you can face when buying a home for the first time.
The first challenge is to ensure compliance with the lender’s requirements. The debt-to-income ratio here is very critical though it varies based on the type of financing being availed by you. Typically, lenders want this ratio to be lower than 40 to 45 percent, that is, your debt should not be over this percent of your income.
Further, you must prove your source of income when it comes to the down payment amount. If you are self-employed or have received gift money that you want to use as a down payment, you must have verifiable documents to show in this regard.
Additionally, a poor credit history might make the lenders deny a mortgage loan to you. Limited savings and rising home prices are also obstacles that might stand in the way of buying your first home.
How to Overcome Obstacles to First-Time Home Buying
Here again, we at Just Livin Realty will advise you on how to make first-time home buying a smooth and seamless experience. So, let us dive into what you should do to clear any issues in your path to owning a house.
Much before you get to the stage of buying a house, start on a savings plan and set aside a part of your income every month. This will be your down payment and help you to qualify for a loan.
Next, go through the financing options once you are ready to take the plunge into buying a home. Complete all the formalities and secure the loan so that you will know what type of house to look for and within what price range. Once you lock in your financing, you can quickly make an offer as soon as you find a house that matches all your requirements.
Our experts will be with you all the way, starting from house hunting to finalizing a house purchase. There is a lot of work to be done that should be left to the realtors to handle.
Lenders will go through a home inspection, title search, title, and homeowner’s insurance before approving a loan. All these are complex tasks and hence best handled by a real estate professional working in tandem with the lender.
After these points have been fulfilled, you can proceed with closing the transaction. Your real estate agent will guide you on the documentation, the closing costs to be paid, and transferring the title of the property to your name.
Do not let the challenges of buying a home for the first time take you away from your goal.