Nashville Fab Living

Discover Nashville Real Estate with Shameka Britton, REALTOR®

Top 10 First Time Homebuyer Tips

Create a Realistic List of Must Have

Image of Contemporary Living in on Create a Realistic List of Must-Haves for your New Home Blog on nashvillefabliving.com

4 Tips to Create a Realistic List of Must-Haves for your New Home

The next first-time home buyer tip in our series is to create a realistic list of must have. Before you start looking at homes, distinguish between your must-haves and your nice-to-haves. This will help you narrow down your search and focus on finding a home that meets your needs and budget. Here’s what you need to know to get started.

 1. Review your budget.

We previously discussed the importance of establishing a budget in Tip 1: “5 Factors When Determining your Ideal Budget“. This is the first and most important step on your checklist. You need to have a firm handle on how much you can afford to spend before you start looking at homes. Keep in mind that your monthly mortgage payment will likely be higher than your current rent, so don’t stretch yourself too thin. You should also factor in the cost of property taxes, homeowners insurance, and any HOA fees or other monthly expenses associated with owning a home.

2. Figure out how much space you need.

Do you need a one-bedroom starter home or a five-bedroom house to accommodate a growing family? Make sure to consider things like storage space, the number of bathrooms, and yard size when making this decision. It’s also important to think about future needs; if you’re planning on starting a family soon, for example, you’ll want to make sure there’s room to grow. However, also be mindful of what is needed right now. Consider how long you plan to remain in the home. Is this your final home or a stepping stone to your future dream house?

3. Decide on the must-have amenities.

What features are essential to you? A dishwasher? An in-unit washer and dryer? A pool? Is a location close to public transportation important? Once you’ve identified your must-haves, you can start narrowing down your choices. This is where the difference between must-have and nice-to-have comes in. Think about the actual purpose of the item. For example: If you have four bedrooms as a must-have to accommodate office space, could you consider other options? If the home has a loft or a formal dining area, would that still work for office space for you and your family? Review your list of must-haves with your Real Estate agent and discuss if those must-haves fit into your budget.

4. Consider your commute.

Location, Location, Location, is still very important when purchasing a home. If you’re buying a home in an area that’s further away from work than where you currently live, figure out how long it will take you to get there during rush hour traffic. Also, think about whether you’re comfortable with making that commute every day or if it would be preferable to find a place closer to work. 

Conclusion: 

Making a checklist of must-haves is an important part of the home-buying process. By taking the time upfront to figure out what’s most important to you, you can save yourself a lot of time and energy later on. Keep these tips in mind as you start shopping for your new home and remember: there’s no such thing as being too picky when it comes to finding the perfect place for YOU! Though this blog only scratched the surface, we hope this was informative nonetheless! There’s plenty more where this came from—for more real estate advice be sure to follow our blog or contact us today!

Check out this video for 10 Important Factors to Consider to Find the Perfect House for You.

10 Important Factors to Consider to Find the Perfect House for You

If you have any questions or would like more information, please contact me at [email protected]. I would be happy to help you with all your real estate needs.

Thank you for reading! I hope this was helpful.

ADDITIONAL BUYER’S TIPS

How to Get Pre-Approved for a Mortgage

Photo of living room with brick wall. Used on blog post, "how to get pre-approved for a mortgage".

How to Get Pre-Approved for a Mortgage

In the previous blog posts in our “Top 10 First-Time Homebuyer Tips” series, we discussed Determining your Ideal Budget and Saving for Home Buying Expenses. Step Three in our Home Buying Series is to “Get Pre-approved for a Mortgage”.

Once you determine your ideal budget, the next crucial step in buying a house is to get pre-approved for a mortgage loan. It sets the tone for your home search, helps you narrow down your options, and demonstrates to sellers that you’re serious about buying. 

The process of getting pre-approved for a mortgage may seem daunting, but it doesn’t have to be. By following these simple steps, you can obtain a pre-approval letter and get one step closer to buying your dream home in no time.

1) Know Your Credit Score 

One of the first things you’ll need to do is pull your FICO credit score. This will give you an idea of where you stand financially and what kind of interest rate you can expect to pay on a loan. If your credit score needs some improvement, there are steps you can take to raise it before you apply for a mortgage. 

How to get your FICO credit score?

The interest rate is one of the most important factors to consider when taking out a loan. The interest rate on your mortgage has a direct impact on your monthly payment. The higher the rate the higher your payment will be.

A. Check Your Credit Card Statement- If you have a credit card, there’s a good chance that your lender is already giving you your score for free. Capital One and Discover are two examples of issuers that show borrowers their FICO scores on monthly statements.

B. If you are unable to get your FICO credit score from your credit card company, you can use myfico.com. However , it’s not a free service.

Are you wondering why I didn’t mention using apps such as Credit Karma and Credit Sesame? When applying for a mortgage preapproval, the lender will review your FICO score. Majority of the credit apps we use today provide a Vantage score. Although, those apps are great for determining your credit history. The score it provides would not be an accurate representation of what the mortgage lender would see on your credit report.

2) Gather Documentation 

Once you know your credit score, it’s time to start gathering the documentation that the lenders will need to approve your loan. This could includes tax returns, pay stubs, bank statements and investment statements. Having all of these documents ready will speed up the process and help your loan officers do their job more efficiently. 

A best practice is to have these files saved to your computer, not print them. When applying for a mortgage approval, majority of the applications are completed online. The files can easily be uploaded to the lenders secure portal.

3) Shop Around for Mortgage Lenders 

After you’ve gathered all of your documentation, it’s time to apply with your chosen lenders. In the next section, we will discuss some important terms to keep in mind. Not all lenders are created equal. It’s important to shop around and compare rates, fees, and customer service before settling on a lender.

Talk to your local bank or credit union, get quotes from online lenders, and compare rates and fees. And remember, just because one lender offers you a great deal doesn’t mean you have to use them—you can always shop around for better rates.

Important Mortgage Terms:

Interest Rates: One of the most important things to compare when shopping for a loan is the interest rate. The interest rate will determine how much your loan will cost you over time. It’s important to pay attention to the Annual Percentage Rate (APR), which includes the interest rate plus any fees charged by the lender. The lower the APR, the better.

Repayment Terms: Another thing to consider is the repayment term. This is the amount of time you have to repay your loan. Loan terms can range from a few months to several years. Choose a repayment term that you’re comfortable with and that fits your budget.

Fees: Some lenders charge origination fees, which are usually a percentage of the loan amount. These fees can add up, so be sure to take them into account when comparing loans. Other lenders may charge prepayment penalties if you pay off your loan early. Again, this is something to keep in mind when shopping around for a loan.

7 Questions a to ask the Mortgage Lender

Conclusion

This process doesn’t have to be a daunting task. Following these simple steps will help ease the process of getting pre-approved for a mortgage immensely. By knowing your credit score, shopping around for lenders, gathering documentation, getting pre-approved, locking in your rate, and following up with your realtor, you can take control of the situation and increase the chances of having a successful home purchase experience overall.

If you have any questions or would like more information, please contact me at [email protected]. I would be happy to help you with all your real estate needs.

Thank you for reading! I hope this was helpful.

ADDITIONAL BUYER’S TIPS

How to Save for Homebuying Expenses

Photo of contemporary living room on blog post, "how to save for homebuying expense".

Tip 2: Save for Homebuying Expenses

In the previous blog posts in our “Top 10 First-Time Homebuyer Tips” series, we discussed Determining your Ideal Budget. Tip two in our Home Buying Series is to “Save for Homebuying expenses”. Some of the expenses when purchasing a house includes the following: down-payment, closing cost, home inspections, appraisal, and earnest money.

Homebuying Expenses:

  • DOWNPAYMENT: A down payment is typically between 3-20% of the purchase price of the home. If you can put down more it would decrease your monthly mortgage payment. I work with a lot of First Time Home Buyers and I understand that oftentimes you don’t have the entire 3.5% to put down on your home. There are down-payment assistance programs that can help, keep in mind that it may increase your monthly mortgage payment.
  • CLOSING COST: Closing cost is the fees associated with finalizing your home purchase. This includes the lender’s fees, title insurance, and other miscellaneous fees.
  • HOME INSPECTION: A home inspection is a visual examination of the overall condition of a property. You should always get a home inspection even if you are purchasing a brand-new home! The cost of the inspection is the responsibility of the buyer and is not refundable. Outside of traditional home inspections, some buyers also have termite and radon inspections.
  • APPRAISAL FEES: The appraiser will visit the property to confirm the value of the home.
  • EARNEST MONEY: This is a deposit that shows you are serious about purchasing a home. It is typically 1-2% of the purchase price and is held in escrow until closing.

Saving for these expenses can be difficult, but there are a few ways to help make it easier. Here are some initial steps you can take to save for your dream home.

Tips to save for a home

1. Determine How Much You Need to Save 

The first step is to figure out how much money you need to save for your home expenses. As mentioned earlier, the standard down payment is 20 percent of the home’s value. However, there are programs available that allow for a lower down payment, such as 3 percent or 5 percent. 

Once you know how much you need to save, you can start creating a budget and looking for ways to cut costs so that you can divert more money toward your savings goal. 

2. Open a Dedicated Savings Account 

Once you know how much you need to save, open up a dedicated savings account that will be used solely for your down payment fund. This will help you keep track of your progress and resist the temptation of dipping into the account for other purposes.  

3. Automate Your Savings 

One of the best ways to make sure that you stay on track with your savings goals is to automate your savings. This means setting up automatic transfers from your paycheck or checking account into your dedicated savings account. This way, you’ll never even see the money and will be less likely to spend it on other things. 

4. Make Extra Payments When Possible 

If you get a bonus at work or come into some extra money somehow, resist the urge to spend it all immediately. Instead, put as much of it as possible towards your homebuying fund so that you can reach your goal even faster. 

Avoid excess spending in general and put any extra money you have towards your savings so that you can reach your goal more quickly. 

Saving for a home doesn’t have to be impossible. By following these tips, you can make the process a lot easier and less stressful. And, before you know it, you’ll have saved up enough for your dream home. 

ADDITIONAL BUYER’S TIPS