| |RateShield Approval locks your initial interest rate for up to 90 days on 30-year conventional, FHA and VA fixed-rate purchase loan products. Your exact interest rate will depend on the date you lock your rate. Once you submit your signed purchase agreement, we’ll compare your rate to our published rates for that date and re-lock your interest rate at the lower of the two rates for an additional 40 to 60 days. Quicken Loans reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Quicken Loans. This is not a commitment to lend. Additional conditions or exclusions may apply.
What's clear is that home buyers have options, and while the savings required to get a first home can climb to the neighborhood of $50,000, they can also come in around the mid-twenties. There are also assistance plans available from Fannie Mae and Freddie Mac, featuring 3%-5% down payments, and each comes with it own pros and cons. First-time home-buyers should also look into state and local plans. The research you invest in your process ahead of time can greatly affect what you have to save up before turning the key to your new front door.
A lender or broker will assess your credit score and the amount you can qualify for on a loan. He or she will also discuss your assets (savings, 401(k), etc.) and debt, as well as any local programs that might be available for down payment assistance. That's where your homework on first-time homebuyer programs can help. If you think you qualify, look for a lender that handles the program you hope to get.
Still, if you familiarize yourself with what it takes to buy your first home beforehand, it can help you navigate the real estate market with ease. So let's get started! In this step-by-step guide, you'll learn what it takes to buy your first home from beginning to end. Whether it's your first time in the real estate market or you're an experienced homeowner who wants to brush up on their skills, this list has you covered.
Closing costs: These are fees you have to pay when you close on your mortgage. They’re based on the individual purchase, but can vary from 2% to 7% of the purchase price of the home, but they’re often split between the buyer and seller. According to Realtor.com, buyers typically pay 3% to 4% in closing costs and sellers typically pay 1% to 3% (you can try to negotiate who pays which closing costs). With some closing costs, you have to use a certain service, but with others, you’re allowed to shop around for a better price. Here are some common closing costs.
What to consider instead: You can put as little as 3 percent down for a conventional mortgage (note: you’ll pay mortgage insurance). Some government-insured loans require 3.5 percent down or zero down, in some cases. Plus, check with your local or state housing programs to see if you qualify for housing assistance programs designed for first-time buyers.
If your available cash doesn't cover your needs, you have several options. First-time homebuyers can withdraw up to $10,000 without penalty from an Individual Retirement Account, if you have one, though you must pay taxes on the amount. You can also receive a cash gift of up to $15,000 a year from each of your parents without triggering a gift tax.
As you’re comparing quotes, ask whether any of the lenders would allow you to buy discount points, which means you’d prepay interest up front to secure a lower interest rate on your loan. How long you plan to stay in the home and whether you have money on-hand to purchase the points are two key factors in determining whether buying points makes sense. You can use this calculator to decide whether it makes sense to buy points.
When you know what you can afford, start limiting your options. Take time to learn the neighborhoods you’re considering: Research the schools and municipal services, and drive through them at various times, day and night, to determine whether you want to actually live there. Do you feel safe walking around the neighborhood? How far is it to the nearest stores and restaurants, and how much does that matter to you?
I was readying myself to start my move as I am aiming to work away from our home and getting a new home is something that’s on my list of priorities. Knowing that getting one’s financial ready first for us to learn whether if we have enough income to sustain ourselves once we move as you’ve mentioned is a very helpful tip. That is something I would surely keep in mind as it would ensure that I can keep on living alone and independently. Thanks for the helpful guide on how to purchase one’s first home!
Even when your purchase offer has already been accepted, if inspections reveal any problems, you may want to renegotiate the home's purchase price to reflect the cost of any repairs you will need to make. You could also keep the purchase price the same but try to get the seller to pay for repairs. Though you may not have much scope to demand for repairs or a price reduction in case you're purchasing the property "as is," there is no harm in asking. You can also still back out without penalty if a major problem is found that the seller can't or won't fix it.
Once you start seeing homes you like, call your agent and ask them to start scheduling viewings. And another, and another. Visit as many homes and open houses as you can. You can use the Trulia app to find open houses scheduled near you. The more comparing and contrasting you can do, the more knowledge you have about the market and your options. Ask your agent for advice about how to buy a house that really fits your needs.
Interest rates, including those offered on mortgage, can be volatile and subject to change. A 0.25 percent rise in interest rate can significantly increase your repayment amount, repayment tenure or both. It is advisable to lock the interest rate for the loan in advance, instead of being at the mercy of the market fluctuations which can be a big risk if the rates rise before you finalize your property purchase. Pre-approved mortgage offers the facility to offer you a rate lock, which means that you can secure a favorable interest rate for the loan. Though chargeable rates are subject to multiple factors, like applicant’s credit score, geographic region, property and the type of loan applied for, attempts to lock in at favorable rates can be beneficial.
Once you’ve made sure the property is in the agreed-upon condition, you’ll set a date to meet with the required parties. Different areas have different requirements as to who must be present, so you might meet one or all of the following: the escrow or closing agent, the attorney — who could also be the escrow agent, someone from the title company, the mortgage lender, and the real estate agents.