Ready to finally stop renting and buy your very first home? Current homeowners will tell you it was an exciting process to finally own their own place and quit sending their landlord rent money each month. And a pleasant surprise is that mortgage interest is actually tax deductible, reducing your annual income tax liability for those who itemize while rental payments have no such deduction. That said, how do you buy your first home?
Your first stop is to speak with an experienced loan officer. There are various loan programs available and your loan officer will suggest a few based upon your current situation. When you speak with a loan officer over the phone, be prepared to answer questions such as “How much do you make each month?” and “How much money do you have available for a down payment and closing costs?” There are loan programs that ask for nothing down such as a VA loan or USDA mortgage and there are those that you can put down more should that be an option for you.
Your loan officer will suggest getting preapproved. This means the lender reviews your current pay check stubs, bank statements and a credit report along with your submitted loan application. You don’t need a property already picked out in order to receive your preapproval letter. Some sellers won’t even consider your offer without one.
Once you get your preapproval letter, you can speak with a real estate agent about buying your first home. The agent will also ask you a series of questions such as where you might want to live as well as the price range you’re preapproved for. How many bedrooms do you need? Will you need a bigger place in the future? Are you looking longer term or perhaps just a few years for the first property? All of these questions might seem a bit overwhelming and while no one can accurately predict the future it gives your agent a road map to homes that meet your needs.
Once you find a property and your officer is accepted, your loan officer will take over from there. Just make sure you provide the documentation your loan officer asks for promptly to avoid any potential delays in the closing process. Buying your first home can be exciting as well as overwhelming for some, just work with your loan officer and ask questions as you go.