First Time Buyers Wish They Knew These Facts

Buying your first home is one of life's most exciting moments, but it can also come with a significant amount of stress and uncertainty. First-time buyers usually have quite a lot to learn in a short amount of time. Fortunately, doing some research ahead of time and working with an experienced real estate agent can put you in a good position to navigate these new waters. Here is a quick list of some common facts most first-time homebuyers wish they knew when they started their home search.

1. Shopping For A Mortgage Can Land You The Best Rate
   Many first-time buyers make the mistake of talking to only one lender during the mortgage shopping process. However, different lenders offer different rates, fees, and quality of customer service, and so shopping around for the right lender is worth the time and effort. We recommend seeking quotes from at least three different lenders as well as a mortgage broker to find the best option for you. Remember to seek quotes within the same 1-2 day period as rates can fluctuate over time.
   
   
2. What You Qualify For Isn't The Same As What You Should Spend
   When you go through the preapproval process, your lender is likely to qualify you up to a certain amount. That amount could be up as high as 40% of your gross income. However, just because you qualify for a certain amount doesn't mean that's the amount you should spend. You need to look closely at your personal finances and factor in both current and future expenses to determine how much you can afford. As a general rule, your mortgage payment should not be more than 30% of your income.
   
   
3. You Should Put 20% Down If You Can
   Saving for a down payment can be challenging, but you should put down 20% whenever possible. If you put down less, you may be required to pay for private mortgage insurance (PMI), which could result in higher monthly payments. However, you shouldn't put 20% down if it completely drains your savings. Owning a home comes with a lot of unexpected expenses, so you want to be sure to have some funds on hand.
   
   
4. The Closing Process Takes Some Time
   Many buyers are excited to move in as soon as their offer is accepted, but the reality is the closing process takes some time. Between the home inspection and finalizing financing, you can expect the closing process to take anywhere from 4 to 6 weeks.
   
   
5. Changes To Your Credit or Financial Situation Can Impact Financing
   During the closing process, it's important that there are no significant changes to your credit profile or financial situation. Avoid making significant purchases, changing banks, moving money, or taking out a loan or line of credit. Your preapproval is likely contingent on no significant changes to your credit profile.
   
   
6. Finding Issues During Home Inspection Is Common
   A home inspection contingency is a standard part of an offer that protects buyers from unforeseen or undisclosed issues with the home. Keep in mind, it's common for the home inspection to uncover minor to moderate issues. After the inspection, you'll have an opportunity to decide how to proceed. You can continue with the sale as is, renegotiate the pricing, or request that the seller make repairs.

Many first-time buyers learn as they go, which is why it's so critical to find an experienced real estate agent to help you navigate unfamiliar territory. Your agent will help educate you on the market and has your best interest in mind.

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