Fundamental Steps for First-Time Homebuyers

If you’re thinking of buying your first home one of the steps you should take early on is making sure you’re financially ready for your purchase. Here are just a few of the financial fundamental steps you’ll need to focus on as you set out to buy a home.

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Build Your Credit

Your credit standing is an important element that will determine which home loan you’ll qualify for. It also impacts your mortgage interest rate. While there are many factors that go into your mortgage application, a higher credit score could lead to a lower monthly payment in the long run.

So how do you make sure your credit is in the best shape possible when it’s time to buy? A few general tips you can use as you work to build and strengthen your credit include:

• Tracking your credit and disputing any errors that show up on your reports.
• Paying your bills on time. This includes making loan payments and paying down any open lines of credit.
• Keeping your credit card balances low. Paying more than your minimum monthly balance when you’re able can help.

Also, check some of our other blogs such as What Credit Score Is Needed To Buy A Home?, How Is My Credit Score Determined? and our webpage on Credit Repair for expert advice on how to raise your credit score.

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Automate Your Savings for Your House Fund

We can help you find down payment assisstance programs if needed however, one of the best ways to save for anything — including a down payment — is to set it and forget it. If you receive a regular paycheck, ask your employer to direct a portion of that payment into a savings account. If you’re a freelance worker or independent contractor, set up a recurring transfer from a checking account to a savings account to establish the routine.

We have several lenders we partner with that are experts at helping first-time homebuyers find the funding for their first home. Just complete the Contact Us form below and we can discuss your needs and get you to several lenders that can help you begin the process. Also, the Texas Department of Housing and Community Affairs (TDHCA) offers the “My First Texas Home Program,” a 30-year mortgage with a low interest rate and up to 5 percent in interest-free down payment assistance. You can obtain an FHA, VA or USDA loan through this program.

Pre-Approved vs Pre-Qualified

Most real estate buyers have heard that they need to ‘pre-qualify’ or be ‘pre-approved’ for a mortgage if they're looking to buy a property. These are two key steps in the mortgage application process. Some people use the terms interchangeably, but there are important differences that every homebuyer should understand.

Pre-qualifying is just the first step. It gives you an idea of how large a loan you'll likely qualify for. Pre-approval is the second step, a conditional commitment to actually grant you the mortgage.Pre-approval from a lender lets you know how much money you can borrow for your home loan. And having that knowledge, plus an understanding of your savings, can help you decide on your target price range for a house. In fact, some Realtors demand to see a pre-approval letter from a lender before accepting a purchase offer.

With your pre-approval in hand, you can start browsing for houses online and see what’s available in your area in that general price point. This can help you really understand your options so you can start to picture your future home.

For Customized Advice, Build a Team of Professionals

Finally, the best way to make you’re prepared for your purchase is to connect with trusted real estate professionals. Having expert advisors in the industry will help you make strong decisions throughout the homebuying process based on your specific goals, finances, and situation. They know the market and can guide you toward the home of your dreams.

Bottom Line

If you’re ready to get the homebuying process started, let’s connect so you can begin to build your team of professionals today. Fill out the Contact Us form today and we’ll be back in touch quickly to help you begin your homebuying process. 

Buying a home can be a daunting task. As an Accredited Buyer's Representative, I show you how to find off market homes, win over other offers in a bidding war, explain the buying process, discuss home inspections and help you seal the deal with negotiation strategies. The more you understand and take advantage of the power you hold, the more successful you’ll be in securing the home of your dreams for a price that won’t give you nightmares. See my book titled '12 Insider Secrets You Need To Know Before You Buy.'