first time home buyer

Financial Fundamentals for First Time Homebuyers

January 26, 2023 by khproperties Leave a Comment

Are you prepping to buy your first home? If so, one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamentals you’ll need to focus on as you set out to buy a home.

Build Your Credit

Your credit is one element that helps determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A recent article from NerdWallet lists a few tips you can use as you work to build and strengthen your credit. They include:

Tracking your credit and disputing any errors that show up on your reports.
Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Automate Your Savings for Your House Fund

You might also be wondering how you can achieve your down payment savings goals. Bankrate provides buyers with a number of tips to help you save, including searching for down payment assistance programs and ways you can save more, faster. As the article says:

“One of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.”

Get Preapproved

As you prepare for your purchase, you’ll also need to have a good grasp on your budget and how much you’ll be able to borrow for your home loan. That’s where the preapproval process comes in.

Preapproval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house.

From there, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the homebuying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home you deserve.

8 Tips For First Time Homebuyers

December 1, 2021 by khproperties 1 Comment

If it’s your first time buying, it can be quite intimidating – you’ve got to deal with agents, sellers, rival buyers, banks, and title companies. And it’s not always clear what role each of them plays in the process. We have worked with many first time homebuyers. It’s great to guide them on the journey of property ownership and help set them on the path to building their wealth through real estate.

Any first time homebuyer should appreciate that they always have access to many professionals who can help explain the various tasks and processes required to buy a home. It’s not like you’ll walk through the experience blindfolded.

To help you on your way and find out more, here’s a quick list of tips for first time homebuyers. You’ll find the act of buying property is not as intimidating as you might have feared.

Start saving: That means not only reducing your day-to-day spending but also working to reduce regular payments on debts for items such as a car or personal loan. These obligations will reduce the amount of money a lender will allow you to borrow.
Work out a budget: Investigate how much you might be able to borrow. Factor in the expenses of buying a home, such as closing costs and moving. You should then have an idea of what you can afford. Setting your expectations early on will focus your home hunting efforts and avoid disappointment.
Arrange financing: Spend time exploring your options. Some banks demand a 20% deposit; others are more flexible. Perhaps your parents will co-sign for the loan, or part of it. Consider using a local lender as they will guide you and recommend suitable loan options.
Pre-approval is good: A lender won’t give you a pile of cash based on your salary. They’ll grant “pre-approval,” which means you can make a monetary commitment with confidence. However, the lender will finalize its approval once they’ve valued and approved the property you intend to buy. Do not sign any document that waives your right to pull out of a transaction until you are approved or you risk your lender refusing you.
Get mentally prepared: With your finances lined up, you need to think about the dynamics of buying a home. If you find your dream place, you better believe others will love it, too. So, be prepared to move quickly to beat the competition.
Find a great agent: For a first time homebuyer, a great agent will make the experience smoother and less stressful. When selecting an agent, ask each one to share with you properties they’ve bought for other clients. This will indicate whether they can find what you’re seeking.
Go hunting: House hunting is fun but exhausting. In a hot market, it can get stressful because of buyer competition. Don’t be put off, and keep your focus. You may miss out on a few properties, but there are many more out there.
Be confident: When making an offer for a home, be confident. Don’t ask your agent to make low ball offers just to see if the seller bites. You risk being labelled a time waster and go to the back of the line. You have every right to make any offer, but be realistic if you want the property.

An Open Letter to First Time Home Buyers

January 17, 2014 by Matt Stigliano 1 Comment

To All the First Time Home Buyers

Dear First Time Home Buyer,

I’ve been thinking about you a lot lately. Something about the market last year and the things I’m seeing early this year tell me this is going to be a big year for you. Whether you simply haven’t been able to afford to buy up until now or you’ve been patiently waiting for things to feel right for you so you could dive into the world of home ownership, you’re out there. I’ve worked with you in the past (not you, but people just like you) and I’ve learned a few things about first time home buyers, so I thought I’d take a few moments to help you out.

First, let me be clear, home buying can be a scary process for the first time home buyer. I’m not trying to spook you, just want you to know that I feel it. I was there once. Overall the process was awesome and I loved it, there were times when I was terrified. Thinking about all that money, filling out form upon form upon form, wondering if I should really be doing this…all of it was a bit much at times. Buying a home is a pretty emotional process.

I learned a few things over the process though and in the end I owned an amazing house and loved it for many years. Buying the second one was a lot easier. Here are some of the things I’d like to pass on to you…

Choose your Realtor wisely. Don’t just take on someone who is your brother’s dentist’s best buddy because you feel obligated to do so. Choose an agent for yourself. By all means, get some recommendations from friends and family, but remember, what works for Uncle Bob, might not work for you. Your agent and you are going to spend some serious time together, so you want someone you can relate to, someone you trust, and someone who communicates with you in a manner most effective for you. Trust is a big deal in the real estate world, especially for a first time home buyer, so talk to a few agents and feel them out. Find the one that takes their time with you and talks to you openly. Without this connection, I guarantee that your experience will not be a fun one – I’ve heard all the horror stories you can imagine.

Even though this is your transaction and your first home, listen to your agent for insight and instinct. Realtors do this everyday and they’ve seen all sorts of different situations – rely on them and their experience. While I encourage you to ask questions and add your input, this is not an ego-head-trip game for agents – they’re in this business to be successful and you don’t become a success by a) not knowing a thing or two or b) pissing off your clients by giving them bad advice.

Prepare yourself for the lending process. This is probably the worst part for most first time home buyers. Let’s be frank, it’s not fun at all. I’ve worked with clients with incredible credit scores and money pouring out of their ears – and yet, they too were nervous about the lending process. No one likes to have their finances analyzed and critiqued. It’s an uncomfortable situation. The trick is to remember that the loan officer wants you to get a loan. Why? Because it’s how they make their money. If you can’t get a loan, they don’t get paid. So, they’re not going to turn you down just for fun. The trick to the lending process is to remain calm and no matter how many times an underwriter asks for the same piece of documentation, just get it to them as fast as you can. Getting things to the lender when they request them is probably the best way to keep your loan on track. All of this is why I recommend finding a good local lender – someone you can meet face to face and get to know.

Being a first time home buyer, you have a lot to learn. Terminology, processes, and even your own wants and needs when it comes to a home. Become a student of real estate. Ask questions. Read up on your local real estate market. Read blogs (like this one of course!). Educating yourself is never a bad idea – real estate or not. Of course, you’ll need to remember that not all sources are the best and what works in Seattle, might not work in San Antonio. Read and learn, but also get advice and information from the locals.

Probably the best advice I can give is simple and comes from one of my favorite authors and series of books, “The Hitchhiker’s Guide to the Galaxy” by Douglas Adams. The advice is so simple (and works in lots of different situations). The advice? Don’t panic. I try to use it as a general mantra for everything I do and it has served me well.

One last thing before I let you go. I predict that this year, like many other years, you’re going to hear the phrase “Now is a great time to buy!” While there may indeed be a convergence of good news in the real estate markets, the oft-overspoke mantra is not one of my favorites. The reason is simple – it’s only a great time to buy if it’s a great time to buy for you. While the phrase is often useful in getting first time home buyers to think about the possibility, it is not an absolute. If you’re thinking buying might be for you, talk to a Realtors and ask questions – they’ll be able to help you see opportunities or stumbling blocks that you may face in your attempt to become a first time home buyer and help you figure out just when is the right time to buy for you.

image courtesy of ElArreglador

A Letter to a First Time Home Buyer

October 24, 2013 by Matt Stigliano 1 Comment

The other day I referred a first time home buyer who had some questions to one of our agents. The buyer had a couple of questions and was looking for advice and help with a particular home they had their eyes on. The agent copied me on their response, and with her permission, I wanted to share it here. It covers some basic questions that everyone has and also is good insight into why you should choose to work with a Realtor.

I have edited the letter slightly in order to keep the buyer’s name and personal information confidential.

I don’t really know what Matt covered as far as lenders and Realtors go and why you should or shouldn’t use one over the other, but here is my take on the matter. I was in the Air Force for twenty-two years and moved fifteen times. I have bought and sold more than thirteen homes over the years. I have used Realtors and not used them. I have used internet lenders and I have used local lenders. I have used my bank lenders and I have used mortgage brokers. What really matters is that you find people who you trust and want to work with and who are willing to give you all the information you need to make a smart decision on the single largest investment you are going to make at that time. Yes, you can do searches on the internet, but because Texas is a non-disclosure state, not all the information on homes is on the internet and much of the information on homes is inaccurate. The listings that most websites (Zillow, Realtor.com, Homes.com, Hot Pads, Trulia, etc.) have are not updated on a regular basis and don’t have accurate information to make a sound decision on pricing. If you look at Zillow’s Zestimate information page it will tell you that as far as Texas, it’s accuracy is only I believe now 8% and San Antonio I think is up to 6% accurate. Not good statistics and this is because we are a non-disclosure state meaning we aren’t allowed to disclose sales data to the public as a whole. Now, if you are just looking at homes and want to see what might be possibly out there, it is fine, but the sale prices might not be accurate and many times the home might already have a contract on it or even sold or no longer on the market.

So do you need a Realtor, I believe you do so you aren’t wasting valuable time looking at homes with bad data, trying to schedule showings, and making offers on homes that aren’t available anymore or their prices have changed. Additionally, a Realtor; worth their salt will also be able to tell you how long a home has been on the market, how much the seller might owe on the home, get you the seller’s disclosure, help schedule inspections with a reliable inspector, help you make a sound offer, and get you in touch with a local lender. Why you ask is that important? When I was moving and buying and selling homes, I found each and every time that internet lenders were never available when I needed to talk to them. There was never just one person I could call and talk to when I needed an answer or my Realtor or title company needed an answer. There were also hidden fees that I found about, always on the day of closing, and I either had to buy or sell the house or lose the deal. Additionally, using a traditional bank lender sometimes can be tricky as they work traditional bank hours. We all know that we look at homes during the off hours and weekends, so why not have a lender that does the same? That is why I like my lenders to be available 24/7 like me. I feel if my clients have to look for their home in their free time, then I need to be available…and so should my lenders. We are a team, right?

So that is my take on the matter. Probably more than you wanted so I will get off the soap box. I don’t know what you want to do about this house now that it is off the market, but like I said, you do have options. We can also set up searches for other homes in the area as well as see if there are other homes you might be interested in and are still on the market.

I am available by phone, text, and email. So please feel free to contact me any time. I am up pretty late at night, so don’t worry about that either. I work weekends as well.

I truly hope to hear from you soon and look forward to helping you find a home.

image courtesy of paul-simpson.org