Leave a Message

Thank you for your message. We will be in touch with you shortly.

First-Time Home Buyers: What to Know

Buying the perfect home that ticks all the boxes can be challenging, especially for first-time homebuyers with little or no experience. Home buyers must meet many tasks, steps, and requirements. First-time homebuyers may also be anxious about making costly mistakes, stopping them from purchasing a home.

Artifact Homes provides a comprehensive home-buying process to demystify these anxieties and fears to get the most out of a first-home purchase.

Considering First-Time Homeownership

Owning a home is many people's dream, especially first-time buyers. However, to make the purchase a happy and satisfying experience, potential homeowners should ensure they're mentally and financially prepared for the accompanying responsibilities.

First-time homeownership entails mortgage, taxes, and home maintenance responsibilities. Preparing for homeownership requires buyers to take critical stock of their finances and expectations.

How to Prepare

Homeownership is about more than just decorating it how you like. It's about being financially and emotionally prepared to maintain it over the years. First-time homebuyers must know that part of their income and time will go towards regular maintenance and repairs. They must be willing to take the risks of homeownership with realistic expectations of its rewards.

Owning and maintaining a home can be a costly process. It can be discouraging to realize that your salary may not stretch as far as your desired home. However, sacrificing a significant portion of your salary to cover the mortgage can quickly turn the experience into a burden instead of a point of pride. As such, we encourage our first-time buyers to look for a modest home now and consider purchasing their "dream homes" in the future when they're financially capable.

The debt-to-income ratio (DTI) is another critical factor that lenders take very seriously. Lenders consider the borrower's DTI to determine if the borrower can afford to take on additional debt. Borrowers with high DTI may not get their loans approved or may not get the best interest rates on their loans. That's why the buyer's debt shouldn't be more than 43% of their income.

Get Financial Details Together

Homeownership is one of the most significant financial decisions, especially for first-time owners. Therefore, ensuring all finances are solid before starting the process is vital. That's why we advise our clients to talk to our team of experts for better insight into their budget by considering their income, debts, location, and down payments.

It's important to see how monthly mortgage payments can add up and how finances could look as a new homeowner. Doing this helps homeowners to keep their ambitions realistic and apply for a sizable mortgage without overspending.

Research First-Time Buyer Programs, Loans, and Mortgage Options

We advise homebuyers to refrain from being bound by loyalty to their current financial institutions when seeking pre-approval or looking for a mortgage. Take time to shop around for different options and offers. Loan fees can be surprisingly diverse.

For example, an FHA loan can have different rates depending on whether the borrower is applying for the loan through their local bank, mortgage banker, credit union, mortgage broker, or large bank. Mortgage interest rates also significantly impact the total price the buyer must pay for their home, which can also vary.

Therefore, it's vital to consider different loan options, buyer programs, and mortgage options before settling on a preferred lender and applying. The lender will verify the financial information provided (checking the buyer's credit scores, calculating DTI ratios, verifying employment information, etc.) before pre-approving the borrower for the loan.

It's also worth mentioning that getting pre-approved for a mortgage doesn't necessarily secure getting the financing for the loan until the process is complete. The loan could fall through at the last minute if there are alterations to the buyer's credit score, such as financing a car purchase.

Start Looking at Homes

First-time home buyers should use all available resources to make their home-buying process smooth. This starts by finding available home options on the market, including using an experienced real estate agent, driving around neighborhoods that interest you, and searching for listings online. Ask friends, family, and business contacts for recommendations. You never know where a good lead may come from.

Don't let physical imperfections, such as the home's location and size, turn you away. We advise our first-time home buyers to look for a home they can add value to. This ensures a bump in equity and helps them up the property ladder.

Real estate agents use the Multiple Listing Service (MLS) as an effective communication tool in the home-buying and selling marketplace. This tool isn't available to the public, so buyers must work with a real estate agent to access better options at different prices.

Make an Offer

A reliable real estate agent helps home buyers decide how much money they should offer for the house they're interested in buying, along with any other conditions the buyer should ask. The agent can then present the offer to the seller's agent, who presents it to the seller. The seller could either accept the offer or issue a counteroffer. This process could continue until both parties either reach a deal or decide to seek other options.

When reviewing the purchasing budget, it's vital not to overlook hidden costs, such as home inspection, property taxes, home insurance, and homeowner's association fees.

Hire a Home Inspector

It's vital to have a trained professional to inspect the home, even if the house appears flawless. A home inspector checks the entire property for safety, quality, and overall condition.

The buyer may rescind their offer and request their deposit back if the home inspection reveals serious defects the seller didn't disclose. Alternatively, the buyer can negotiate to have the seller make these repairs or discount them from the selling price.

Closing on the House

The buyer and seller should be ready to close if the home inspection doesn't reveal significant issues. Both parties sign paperwork to transfer ownership, hoping nothing falls through at the last minute. The buyer may pay to appraise the home, do a title search, obtain private mortgage insurance, and complete mortgage paperwork to ensure everything checks out.

Other closing costs may include title insurance, loan origination fees, taxes, and credit report charges.

Why Hire a Real Estate Agent?

Working with a real estate agent makes a huge difference when buying a home. Here are some major benefits of hiring a real estate agent when buying a home. They:

  • Get you a better price
  • Save you time
  • Are motivated to find you a home
  • Connect with an inner professional network
  • Have access to MLS
  • Know the market
  • Maintain ethics
  • Possess expertise
  • Know the lay of the land
  • Understand complex transactions

How Long Does Buying a House Take?

Purchasing a house can take as little as a few weeks to several months, depending on how long it takes to find a home that suits you, the time it takes to secure financing, and how long it takes to go through the closing process. On average, the closing process can take one to two months alone! We recommend talking to a local real estate agent to get a more accurate timeline of how long it might take to find a suitable property based on local market conditions.

Artifact Homes Will Help Find Your Dream Home

Artifact Homes brings together a compassionate, resourceful, and dedicated team to help first-time home buyers reach their home buying and selling goals. We work with our clients every step of the way to make their home-buying process as smooth and comfortable as possible.

Purchasing a new home is a significant investment, especially for first-time owners. Having an experienced team to help with the complicated process is welcome. Contact us today to learn more about buying a new home and how we can help make the process easier.

Let's Work Together

We pride ourselves in providing personalized solutions that bring our clients closer to their dream properties and enhance their long-term wealth.

Follow Us