Buying a home is exciting, especially when you're buying for the first time. In the midst of all of the excitement, it's easy to become blinded by beautiful back-splashes, granite and quartz counter tops, hardwood floors, and fenced-in backyards. While looking at homes that are completely perfect from top to bottom, you may begin to rationalize a larger purchase than you had originally planned for — "This house is perfect for me; it's worth $50,000 extra dollars for me to have a house with enough space in a perfect location," or "We were planning on spending a little bit of money on painting; we can spend $50,000 extra on this house because it doesn't need any work."
FHA loan: Depending on property location and other, personal factors, you could qualify for a home loan from the Federal Housing Administration. In most cases, you'd be expected to make a down payment of approximately 3.5% (with a 1.75% insurance premium, and at a 4.25% interest rate). A down payment on our $300,000 model: $10,500. Together with closing costs and a buffer, savings required would be $26,916-$28,416. Notice, however, that you're paying a great deal more than in the non-FHA model when it come to the higher mortgage-insurance premiums -- some $43,485 over 103 months. Still, the FHA plan may be more manageable for some, as the initial down payment is smaller and insurance payments are spread out.
Right from an escrow account to real estate attorney, all involved services and entities cost money which can snowball into a big amount. Many such services take advantage of consumers' ignorance by charging high fees. Junk fees, a series of charges that a lender imposes at the closing of a mortgage and is often unexpected by the borrower and not clearly explained by the lender, are a big cost. They include items like administrative fees, application review fees, appraisal review fees, ancillary fees, processing fees and settlement fees. Even fees for legitimate closing services can be inflated. If you're willing to speak up and stand your ground, you can usually get junk fees and other charges eliminated or at least reduced.
"Many first-time homebuyers will begin to look at properties prior to speaking with a lender, but this is a huge no-no," says Colin McDonald, a licensed real estate agent at Berkshire Hathaway HomeServices Blake, in Delmar, NY. "Most Realtors or sellers will not start to show houses to buyers until they've actually spoken with a lender and can provide a pre-qualification letter."
As a metro area straddling two states – Missouri and Kansas – Kansas City keeps the cost of living cheap for residents of both states. With housing and utilities typically costing just over 26.3 percent of the blended annual household income, Kansas City moved up two spots on the Best Affordable Places to Live list this year, when it ranked No. 19 in 2016.
Mortgage insurance: If you take out a conventional loan and put down less than 20%, it’s possible you’ll have to pay private mortgage insurance, which protects the lender financially. You can typically request for PMI to be canceled once you reach 20% equity in your home. If you take out an FHA loan, you have to pay mortgage insurance, though you may be able to cancel your insurance once you pay down enough of your loan.

First-time homebuyers are often moving from rentals that use less energy (gas, oil, electric, propane, etc.) and water than a larger new home will. It is easy to be ambushed by soaring rates when your new house has ceilings higher than your rental – or older windows that leak air. Then there are unexpected utilities, such as buying gas to power a lawnmower. These costs can blow a budget.
Prior to the closing date, the buyer will want to verify with his or her agent, lender, and escrow company that all of the necessary documents have been signed and terms met. If they have not this should be taken care of immediately to ensure that there are no last-minute problems. The buyer will also want to verify what forms of payment are acceptable. On the closing date, closing costs and fees will be paid.
First-time home-buyers are sometimes surprised when they see how closing costs can add up. The average amount is 3% to 6% of the price of the home. Given that range, it's a wise idea to start with 2%-2.5% of the total cost of the house, in savings, to account for closing costs. Thus our $300,000 first-time home buyer should sock away about $6,000-$7,500 to cover the back end of their buying experience. Tallying the recommended savings so far, the amount comes to $36,000-$37,500.
Speaking of defects, now is also the time when you'll get the home inspected, which typically costs between $200 and $500. If there are issues, such as a non-functioning fireplace or an old boiler, you may be able to ask for a price reduction to help cover the cost of repairs. And if you find any deal breakers, such as an unstable foundation or serious mold, you have the option of backing out now.
Once you have researched the home buying process in detail, the next phase is to take actionable steps towards your goal of becoming a homeowner. The home buying process is no doubt a long and arduous process, and it is possible that you will experience some setbacks along the way. At times like these, a helpful home buying process checklist will prove to be helpful:
First-time Home Buyer Information, Tools and Resources Buying your first home can be exciting and overwhelming – which is why we have a variety of first-time homebuyer tools and resources to help you. Whether you're just starting to save or you already have a house in mind, we can help you get your keys to your first home. first time home buyer, first time home buyers, first time homebuyer, first time homebuyers, first time home buyer loan, first time home buyer mortgage
Want a trusty home-buying guide by your side? Most first-timers will want a great real estate agent—specifically a buyer's agent, who will help you find the right houses, negotiate a great real estate deal, and explain all the nuances of home buying along the way. The best part? Their services are free to first-time home buyers (since the seller pays the sales commission). Here's how to find a real estate agent in your area.

Enlisting the help of a real estate agent can make your search much easier. According to the National Association of Realtors, 88 percent of all buyers in 2017 purchased their home through an agent. A good real estate agent will inform you on the home buying process and provide their expertise on local market trends. In addition, they will connect you with listings within your price range that best suit your needs, as well as help negotiate the purchase price.
As you save money for your down payment, avoid the temptation to invest in the volatile stock market with money you hope to use in the next year or two. While you might be tempted to try to earn a greater return on your money than an online saving account paying one percent, the greatest risk is not having your money available when you’re ready to buy a house.

The last step in securing a home mortgage, and ultimately buying a home, is getting an official loan commitment for a specific home and for a specific sales price. Once again, you'll undergo a credit check, so make sure you don't take out any loans or new credit cards right up to home closing date - that could impact your mortgage loan in a negative way. At this point, you don't want to raise any "red flags" to lenders, so keep your personal balance sheet clean during the mortgage loan approval process. Once you've cleared this hurdle, you'll get a loan approval letter for the specific home you want to buy.
 “Transfer documents” refers to the documents relating to the transfer of ownership from the seller to the buyer. Most documents will be signed by the seller and delivered to the buyer for your review. Documents include: 1) deed, 2) bill of sale, 3) affidavit of title (or seller’s affidavit), 4) transfer tax declaration, 5) transfer tax declaration, and 6) buyer / seller settlement statement. It’s important that you do your due diligence and read through the transfer documents to make sure everything says what it should say.
4) Choose the right loan term for your needs. A 30-year loan has lower monthly payments and can be advantageous if you'll make good use of the savings by investing them or paying down high interest debt. You can always make extra payments if you want to pay the loan off sooner. But if you're honestly more likely to splurge the money you save each month with a 30-year loan, the 15-year loan could be better since it will cost you less in interest and you'll pay it off sooner.

A title search and title insurance provide peace of mind and a legal safeguard so that when you buy a property, no one else can try to claim it as theirs later, be it a spurned relative who was left out of a will or a tax collecting agency which wasn't paid its dues. A title search is an examination of public records to determine and confirm a property's legal ownership, and find out what claims, if any, are on the property. If there are any claims, those may need to be resolved before the buyer gets the property. Title insurance is indemnity insurance that protects the holder from financial loss sustained from defects in a title to a property, and protects both real estate owners and lenders against loss or damage occurring from liens, encumbrances, or defects in the title or actual ownership of a property. 
Before you begin the home-search process, it’s crucial to get a good idea of how much house you can afford. Financial expert and author Dave Ramsey recommends multiplying your monthly take-home pay by 25 percent to determine what your maximum mortgage payment should be. You can then use a mortgage calculator to determine the ballpark home price that will keep your monthly payment under that amount.
 A conventional loan is a loan that is not backed by the government (meaning that the government doesn’t make any guarantee that you will pay the mortgage), and therefore, carries private mortgage insurance if you put less than 20% down. Conventional loans adhere to guidelines set by Fannie Mae and Freddie Mac and are available to everyone, but are more difficult to qualify for than VA or FHA loans (you need better credit and a steady income, for example).
Your property taxes are a fixed percentage of your home’s value based on the tax assessor’s appraised value of your home. Property taxes are paid to township or county in which the home is located. You will pay this tax annually, semiannually or as part of your monthly mortgage payments (the tax portion of the payment will go into your escrow account). The local tax assessor’s office can provide you with a specific property tax rate.

Variable rate mortgages are also known as adjustable rate mortgages, float up and down on a regular basis, based on the movement of U.S. Treasury bonds. Treasuries are tied closely to the overall U.S. economy, and ebb and flow based on the health of our nation's economy. Variable rate mortgages typically come with lower interest rates up front, but with the potential of seeing those rates rise after an interim period of five-to-seven years after the mortgage loan is signed.
Homeowners insurance and property taxes very based on your geographic location. Florida has notoriously high homeowner's insurance rates, where they average $161.08 per month. In Idaho and Wisconsin, rates are a bit lower, averaging below $50 per month, according to Value Penguin. Property taxes average higher in New Jersey, New Hampshire, Texas and Wisconsin and they're lower in Louisiana, Hawaii, and Alabama.
Beyond pride of ownership, it's important to realize another benefit. First, real estate moves in cycles, sometimes up, sometimes down, yet over the years, real estate has consistently appreciated. The Office of Federal Housing Enterprise Oversight tracks the movements of single-family home values across the country. Its House Price Index breaks down the changes by region and metropolitan area. Many people view their home investment as a hedge against inflation.
First-time home-buyers are sometimes surprised when they see how closing costs can add up. The average amount is 3% to 6% of the price of the home. Given that range, it's a wise idea to start with 2%-2.5% of the total cost of the house, in savings, to account for closing costs. Thus our $300,000 first-time home buyer should sock away about $6,000-$7,500 to cover the back end of their buying experience. Tallying the recommended savings so far, the amount comes to $36,000-$37,500.

Lastly, what's the market like in the neighborhood? Is it like New York City, where condos get snatched up with all-cash offers, or are you in a Las Vegas-esque location, where empty homes are a common site? In the former situation, it may be a good idea to start with a strong offer to beat out an army of other suitors, whereas you may have more leeway in a market like Vegas.
You most likely deposited earnest money when you signed the purchase agreement, which is a deposit made to a seller indicating the buyer's good faith, seriousness and genuine interest in the property transaction. If the buyer backs out, the earnest money goes to the seller as compensation. If the seller backs out, the money is returned to the buyer.
You'll want to know in advance that you likely qualify for a home loan, and that's where a credit check can prove invaluable when you buy a house. Your credit check will track your financial health using data from the three primary credit reporting agencies -- Equifax, TransUnion and Experian. Your credit score from each agency can range anywhere from 350 to 800. The higher the credit score, the more likely you'll be granted a home loan, and the more likely you'll pay a lower interest rate when securing a home mortgage (that's because a high credit score will be viewed by a mortgage lender as a lower-risk loan proposition). In your run-up to your credit check, avoid taking out any loans or credit -- that will raise your credit risk level in the eyes of lenders -- and make sure you pay down any debt owed, and ensure you've got a good track record of paying your bills on time.
If your offer called for a home inspection, this is a big day. Sure, you get to have a home inspector look over the home to make sure there are no unseen defects you want to negotiate to have fixed. But more importantly, this is the most time you’ll get to spend in your new home until closing. Go ahead and start measuring things and figuring out what goes where. This may be the last time you are inside the home until it is yours, several weeks from now.
Homeowners insurance and property taxes: You’ll typically have to prepay homeowners insurance and property taxes at closing, and you should pay them on an ongoing basis as long as you own the home. The cost varies depending on your home and location. If you have an escrow account set up, these charges are rolled up into your monthly mortgage payment. But if you don’t have an escrow account, you’re in charge of paying them on your own, and you may have the choice of paying them monthly or annually.
The first step is to contact your local Coldwell Banker agent to begin the home buying process. If you are not already working with a Coldwell Banker agent, let our Agents & Offices Search assist you in finding one. By choosing a Coldwell Banker agent, you will have a professionally trained, experienced agent to offer you agency representation options and full service.

When you’ve made an offer that’s within your budget, your Realtor will prepare the paperwork for you to sign and will submit it, along with your pre-approval letter and your earnest money, which is a good-faith deposit of about 1 percent of the purchase price. All this usually happens quickly, especially if other buyers are interested in the same property.
Seek more than one estimate for expensive repairs, such as roof replacements. A good real estate agent should be able to give you referrals to contractors who can give you estimates. But you also should seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.

Note that if our home buyers had saved $60,000 for the down payment, their monthly bill would drop to some $1,600, eliminating the need for mortgage insurance. But in our model, mortgage insurance accounts for just $1,356 annually over 6.5 years in the $60,000-down-payment case -- or $8,800 total. Turns out that's a lot less than saving the additional $30,000 to hit the 20% down-payment mark. And so, if savings are an issue, first-time buyers might take on the insurance in exchange for a lower down payment.
Home inspection, a physical examination of the condition of a real estate property, is a necessary step to not only know about any problems with the property, but also get a look and feel of the surroundings. If you find a serious problem with the home during the inspection, you'll have an opportunity to back out of the deal or ask the seller to fix it or pay for you to have it fixed (as long as your purchase offer included a home-inspection contingency).
Next, consider how long the home has been on the market, and how incentivized the homeowner is to sell. For example, if the seller is living in a transition home while waiting to sell, you may have a better chance of getting the seller to accept a discounted offer. But if he's casually putting the home on the market to see how much he can net, the seller may be more apt to wait for the perfect price.
As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the "over-55" rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit—subject to limitation—free from taxation.
Look at properties that cost less than the amount you were approved for. Although you can technically afford your preapproval amount, it’s the ceiling — and it doesn’t account for other monthly expenses or problems like a broken dishwasher that arise during homeownership, especially right after you buy. Shopping with a firm budget in mind will also help when it comes time to make an offer.
Unicorns do not exist in real estate, and finding a perfect property is like finding a needle in a haystack. Looking for perfection can narrow your choices too much, and you might pass over solid contenders in the hopes that something better will come along. But this type of thinking can sabotage your search, says James D’Astice, a real estate agent with Compass in Chicago.

Ask to be present during the inspection, because you will learn a lot about your house, including its overall condition, construction materials, wiring, and heating. If the inspector turns up major problems, like a roof that needs to be replaced, then ask your lawyer or agent to discuss it with the seller. You will either want the seller to fix the problem before you move in, or deduct the cost of the repair from the final price. If the seller won't agree to either remedy you may decide to walk away from the deal, which you can do without penalty if you have that contingency written into the contract.
In order to purchase a home, people must have cash for a down payment. Unfortunately, many people have other obligations and debts that make it difficult to save the type of money that is needed. This is why one of the first steps to buying a home is to save for the down payment. In most cases, lenders require a twenty percent down payment. Buyers may choose to open a savings account in advance, or the down payment may be given as a monetary gift from a family member.
5) Shop around for a mortgage. Even a slightly higher rate can mean paying significantly more interest payments over the life of the loan so don't just talk to your existing bank. Consider non-profit credit unions, web sites like bankrate.com and eloan.com, and independent mortgage brokers who can shop around from multiple mortgage companies to find the one that can offer you the best deal. Just try to do all of your mortgage shopping within a 30 day period so it doesn’t affect your credit too much. You can then use this calculator to compare the loans.

Your agent will send listings to your cellphone. You'll also pick up House For Sale magazines and read classified ads in your local newspapers. You'll probably spend an inordinate amount of time surfing the Internet for homes. You might even plan afternoon drives to preview neighborhoods. Those are all excellent ways to see what's available. Here are some tools to help you narrow your home buying search.
Several years ago I remember a friend advising me to purchase a house before I was ready, and now I have been curious about the repercussions of purchasing a house outside your financial capabilities. I appreciate that you specifically pointed out that you should never stretch to buy your primary residence thinking that you can take cash out or flip it for a quick profit in a few years. Thank you for the advice regarding financial planning in purchasing real estate!
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