What goes into buying your first home

If you’re looking to plunge into homeownership, you might want to lace your boots up because we’ve got some legwork. Admittedly, buying a home isn’t a two-step dance like most first-timers would anticipate; the process demands time, research, financing, and a great deal of paperwork. While this might sound intimidating to some, it’s all in good grace. Following precise home acquisition procedures and codes will give you the confidence to move forward with your investment and streamline your transition, so it’s worthwhile. With that, let’s catch you on what it takes to be a homeowner. 

The five-step guide to buying your first home

When buying a home off the market, new entrants often have two things in mind; bagging the best deal and correctly going about their acquisition. The latter concern is what we’re looking to address. By understanding the steps to homeownership, you’ll not only be able to save yourself a great deal of hassle, strain, and time but also find answers to some of the standard home acquisition queries new buyers have, say current mortgage rates and financing options. Sounds promising? Read on for more insights on buying your first home.

Know what you want

Buying your first home intrinsically starts by understanding your property needs. What are you in the market for? Is it a townhouse, a condo, a duplex, or a studio apartment? Assess your residence needs to fine-tune your search down to specifics. Scope out the area you want to purchase your property, such as making a list of condos for sale in Maui Hawaii to help you narrow down your search. Don’t forget to factor in details like locality, square feet, number of bedrooms, and baths.

Save for down payment

Before seeking out external financing options, it’s advisable to save for your property’s down payment. The sum is often valued at 20 or 30% of the property’s total purchase price and proves your eligibility for financing from sellers and lenders. Essentially, the downpayment will lower your loan-to-value ratio, meaning the more significant the down payment, the lesser your mortgage loan, subsequently minimizing risk for your lender. 

Note: Down Payments are impertinent to buyers paying for their homes in cash. 

Check credit score

Credit scores are just as crucial as getting your finances in order; these numerical expressions ranging from 300-900 will be used to evaluate an individual’s creditworthiness. A high range credit score depicts an impeccable loan repayment history; a lower credit score, on the other hand, proves otherwise. Homebuyers looking for financing will find a good credit score to work in their favor. Conversely, if your credit score is far from excellent, don’t sweat it; there are alternative ways to improve it.

Organize documentation

During the application process, sellers, banks, and lenders will ask for authentication documentation, from government-issued identification to proof of income and down payment cheques. Along with the mentioned documents, lenders expect first-time homebuyers to provide information on any debts, financial responsibilities, and assets they may own. Be sure to attach all the applicable documentation to avoid last-minute bustling. 

Get financing

The final step is outsourcing financing for your home. First-time homebuyers that cannot afford to finance their property purchase independently are advised to take out mortgages. Reach out to your bank and find out how much they charge on mortgage rates. Alternatively, you can work with private lenders and mortgage brokers to get the necessary funds to make your move.

Pro tip: Send out several proposals to score the best rates in the market.

Conclusion

In a perfect world, buying your first home would be as effortless as plunking down the bills and signing the paperwork. In actuality, however, the journey to homeownership is a bit spinier. Before you can pick out your furniture and color palettes, you’ll have to work through the preliminary procedures and codes, and yes, they are mandatory. Alternatively, you maintain the option to skip the legal and real estate hassle by hiring lawyers and real estate practitioners to help you out with the process. Field experts like mortgage brokers will ideally take this responsibility and stress off your shoulders and work their magic to get you the best market deals possible. All in all, it’s a win!