Steps to Buying a House

Steps for First Time Home Buyers

First comes apartment, then comes a home with a multi-car garage – or that’s how we at NASB think the old nursery rhyme goes. The traditional melodies have shown their wear as modern society remains on the fence about buying a new home. However, if you’ve decided the home-buying lifestyle is for you, there are many factors you need to consider. As a first time home buyer, you’ll be subjected to many new experiences such as shopping for private mortgage insurance or gathering an exhaustive list of your credit histories. We thought it would be nice for a first time home buyer to really know what lay ahead of you. Below are some of the steps you’ll take as a first time home buyer.

Reconnaissance

Touching back on what we just mentioned above, it’s important to do a little homework as a first time home buyer. We’re not just talking about driving around and scouting out dream homes for sale. That’s obviously an important process, but we’re talking about doing the paperwork before you even consider making an offer.

Here are a couple of steps you’ll need to take during the preliminary “grunt” work of first time home buying:

  • Sit down and make a detailed budget with your monthly expenses against your income. This will show you how much sway you have in your monthly budget for a new house payment.

  • Gather all information related to your credit history, including any possible bankruptcies or foreclosures. Some loans, like the FHA or VA, will accept your mortgage application even if your credit history has been plagued by some economic hardship. The important thing to remember while buying your first home is to be honest and forthcoming about your credit history. What you don’t disclose immediately will show up later and potentially slow the entire process.

  • Understanding your credit score. Allowing a bank to pull your credit and discuss your credit score can help you understand what programs are available to you. The majority of banks will do this at no charge. Making changes to your credit bureau takes time. If you need to improve your credit by 10 or 20 points to acquire a lower interest rate, the sooner you know that, the better.

Build a Solid Foundationfirst time home buyers

Once you’ve organized all the information pertaining to your financial history and income, it’s time to do some research on the house that will fit your budget. As a first time home buyer, you’ll have options that seem attractive, but may not fit within your projected plan for a mortgage. It’s also important to research which type of mortgage you’ll apply for. If you need help, most lenders will help you fill out a Pre-Qualification form. Here is some information on Pre-Qualifications:

  • This document is both informative and non-binding, so you can fill out several ‘prequals’ before committing to a bank.

  • You’ll find out which mortgage options are right for you in a relatively painless way.

  • It’s important to remember that Pre-Qualifications are not the same as Pre-Approvals

Speaking with a lender before you commit to buying your first home is important. There are certain aspects to the loan approval process, like appraisals and private mortgage insurance (PMI), which you’ll need to understand before you move forward. Each loan package has different qualifications, so doing your research will go a long way before you make an initial offer.

Sign on the Dotted Lines

Depending on the approval of your offer, it’s time to add the finishing touch. The life of your new mortgage is set to begin, but more importantly so too is your life in a new home. A lot of the final documentation is handled by a dedicated team at NASB, but it’s important that you standby to assist on any potential questions the bank may have before closing.

There isn’t a lot for you to do, other than hope for the best after making an offer on your first home. But once you’ve been approved by the lender and the real estate company, it’s time to celebrate! The process for buying your first home can be stressful, but if you follow our steps to success, you’ll be thankful for the early preparation. NASB is proud to help our customers achieve their goals by assisting with all unique mortgage needs.

Want to Get Started? Let's Talk!

To begin the loan process, contact one of our loan consultants today. Or download our free guide today and continue learning.