First thing’s first – are you truly a first-time home buyer? If this is your first time borrowing money from a lender to purchase a home and in return, you are obligated to pay it back, then you are a first time home buyer. You are a mortgagor who takes the loan, using your property as security for repayment on loan. The lender becomes a mortgagee who now has a security interest in the property when you sign the promissory note. You both gain fundamental legal rights that you may act on if rules are broken. The aforementioned applies even if the lender is public or private. Thus, you must think about and decide what do you want.
The saying location, location, location, is not a myth. If you want a home within a particular school district, that will narrow your search down. If you want a house with a
basement, that could narrow your search down to another specific area. If you care about the closeness of grocery stores and pharmacies, you will need to drive around the neighborhood and look for yourself. If you want to live in a community without a homeowner’s association, where will you find that? Here is where a dependable realtor will come into play, and you should do a bit of vetting when making your realtor decision. Referrals and independent research are helpful, but merely engaging with the other person tends to be the most useful. Your realtor is someone that you want to have a good and comfortable level of trust in. After you have hired a realtor, depending on the realtor, you will either start the home search or see what you qualify for with lenders.
When you have found a home or someone to build it for you, it’s essential to decide (if you are doing this with someone else), who will apply for the loan. You may want to have the home in one person’s name, so that the other person may use their credit for something else. Having a co-signer may not be needed. Obtaining a loan is not a bad choice, but you must ensure that you understand the legal implications. You want to be familiar with your lender and know how they operate. You want to ask questions and understand the specific details of your loan, such as whether your interest rate is fixed or adjustable. Perhaps you are moving into an area where the property taxes have recently increased due to increased value in homes, thus, making your mortgage payment also increase soon. You must understand what your escrow is, meaning that your property taxes and insurance may be in your mortgage payment. Often, your insurance and property taxes will be included in your monthly payment, and this is a wise investment. Once you have decided on the home, and secure funding, it’s important to continue investing in yourself. Investing in yourself requires a thorough inspection of the home, with a good inspector. At this point, you may have already paid earnest money (which is a good faith payment towards the purchase of the home), in which you have a limited amount of time to rescind. Meaning, you are in the offer and acceptance stage at this point – you have put a money offer on the home that you wish to purchase. You are now in the contract stage and the time for closing on the property starts to tick. This is where negotiations come into play and having a realtor – or someone experienced representing you – may be widely beneficial. If you need or want something fixed, you will have to ask the seller. The seller could say no, and then you’re back at the beginning, which means you may have to walk away from the home.
Assuming all goes well, a closing date will be tentatively set, and you will tender the down payment (if you have one) a few days before that date. The closing will occur at a closing attorney’s office in which you, your realtor, the seller, the seller’s agent, and the closing attorney will be present. You and the seller will sign the documents, such as the Purchase and Sale Agreement, Department of Urban and Housing Development documents, the promissory note, and much more. After the closing happens, the deed to the property will be recorded in the county in which the property is located. You will receive the keys that day, and now you are a homeowner!