If you’re a first-time home-buyer, it’s easy to get overwhelmed, especially in this market. That’s why we’re here to guide you through the process of being a first-time home buyer.
Here’s everything you need to know.
What Is a First-Time Home-buyer?
A first-time home buyer is someone who has never owned a home. First-time home buyers have access to a number of tax breaks and assistance programs.
Buying Your First Home: A Step-by-Step Process
Step 1: Assess Your Finances
This is the biggest purchase you’ll ever make, so make sure your finances are in good shape. Make sure you’ve saved enough for three to six months of living expenses. Factor in your debt, income, down payment and credit score to figure out how much you can safely spend on a home.
Although you can still get a loan with a credit score as low as 500, you’ll get more favorable terms with a credit score of 760 or higher. To avoid paying PMI (Private Mortgage Insurance), you’ll need to put down a down payment of 20% for a conventional loan.
Step 2: Choose the Right Mortgage and Lender
Explore FHA and conventional mortgages to find out what will work best for you. Shop around and compare fees from a variety of mortgage lenders before choosing one.
Step 3: Get a Preapproval Letter
Once you’ve chosen a lender, apply for a preapproval letter which states the amount you can afford.
Step 4: Get a Real Estate Agent
A good real estate agent will be familiar with the local market and able to negotiate.
Step 5: Shop For the Right Home
Consider your lifestyle and determine what kind of home you want: a townhome, a single-family home, a starter or a forever home.
Step 6: Negotiate
Once you make an offer, prepare for it to be accepted, rejected or countered.
Step 7: Get a Home Inspection
A home inspector will find potential issues that you won’t always see.
Step 8: Purchase Home Insurance
Your lender will require you to purchase home insurance to protect you if damage necessitates costly repairs in the future.
Step 9: Finally Close!
The last step is to sign all the paperwork to make the home your own.
What’s Next? Now that you own a home, you’ll want to set aside money for fixes or improvements.
First-time home buyers in New Mexico can count on the team of experts at D Realty to guide you through every step of the process. Contact us today.