Buying Your First Home: What to Expect and Where to Start
Buying your first home is a significant milestone. If you're new to the process of purchasing real estate, you may not be familiar with everything involved. Fortunately, two key professionals can help you get started on the right track—your realtor and your lender. Whether you connect with your realtor first or your lender, these experts will work together to help you find the perfect home within your budget.
So, what should you look for when choosing these professionals, and what can you expect from the process?
Find a Real Estate Agent
Interview Agents: Look for a buyer’s agent who is experienced and knowledgeable about the areas you're interested in. Don’t hesitate to meet with several agents. It’s important to find someone you're comfortable with—someone who truly listens to your needs and preferences in a home.
Sign a Buyer’s Agreement: Once you’ve chosen an agent, formalize your working relationship with a buyer’s agreement.
Define Your Needs: Identify your preferred location, property type, size, and desired features.
Browse Listings: Review the online listings your agent sends you. Be sure to give feedback on what you like or dislike about each property so they can refine the search to better match your needs.
Find a Lender
Shop for Lenders: Research multiple mortgage lenders and compare interest rates, loan terms, and customer reviews. Your realtor may have recommendations for local lenders—a local lender familiar with your target market can be a major asset.
Gather Documents: Prepare important financial documents such as pay stubs, tax returns, and bank statements. Your lender will provide a list of exactly what is needed.
Check Your Credit Score: Review your credit report and score. A strong credit score is essential for securing a favorable mortgage rate.
Review Your Savings: Determine how much you’ve saved for a down payment and closing costs.
Calculate Your Debt-to-Income Ratio (DTI): This ratio helps lenders understand your monthly debt obligations compared to your income. It’s a key factor in determining how much you can borrow.
Determine Affordability: Consider what you can comfortably afford, including mortgage payments, property taxes, homeowners’ insurance, and potential maintenance expenses. Based on your credit score, savings, and DTI, your lender will help you estimate a realistic home-buying budget.
Get Pre-Approved: Obtain a pre-approval letter from your lender to show sellers that you’re a serious buyer. In today’s competitive market, many sellers require a pre-approval before considering an offer.
Establishing your home-buying team early—both your realtor and your lender—will help ensure a smoother, more confident search for your first home.