What to Expect as a First Time Homebuyer
May 4, 2023
If you are looking to purchase your first home, being prepared is key. Buying your first home is an exciting time as you make the important decisions that come along with any large purchase. Familiarizing yourself with each step in the homebuying process can help make these big decisions easy.
Where should someone start that’s looking to buy their first home?
The first step is to build your budget. Mapping out your monthly income and expenses can help you figure out what your comfortable spending on a mortgage and down payment.
It is important to also include the other expenses like inspections, home maintenance, and moving costs that are associated with purchasing a home. After you have determined your budget, you can begin the preapproval process to help with your financing.
What does the preapproval process look like?
Reaching out to a mortgage lender is the next step in the home buying process. Your lender is there to help you to get approved for a mortgage and give the best advice and service possible. Reviewing your budget for down payment and closing costs will help to ensure your preapproved for the correct amount. Sellers often look for preapproval as it is a sign a buyer is serious.
After you’ve been preapproved, you’ll know your borrowing limit, the interest rate for your home loan, and if you’ll need mortgage insurance. To prevent mortgage insurance or PMI, you’ll want to have 20% of the purchase price.
Sometimes you may get preapproved for more than you were intending on spending. It is important to stick to your budget and make sure you’re comfortable with the projected monthly payments.
When can I start house hunting?
Once you have been preapproved for a mortgage, it’s time to start looking for your future home with or without a realtor. If you are working with a realtor, you’ll want to discuss your non-negotiables before looking. Whether that be number of bedrooms or a fenced-in backyard, an open dialogue will help prevent the fatigue and frustration that can sometimes come with searching for a house.
After you’ve found the right fit and your offer is accepted, be sure to notify your mortgage lender and they’ll help walk you through the next steps like inspection, appraisal and any other documentation needed.
OU Credit Union offers a First-Time Homebuyer program that provides step-by-step assistance during the home buying process. This program is set up to help you achieve your dream of owning a home! Along with this program we offer:
- $500 off on closing costs
- 10, 15, 20, 25, and 30-year terms
- Down payment as low as 3%
- Mortgage calculator for your budget
Visit our website or stop by your local OU Credit Union branch to learn more about our First-Time Homebuyer program.
Tags: Home Ownership, Money Management, Tips and Tricks