First Time Home Buyer Steps
Sacramento 1st Time Home Buyers need to know a few things before setting off to buy a home. This article will show you the first time home buyer steps in a series of 2 articles. This is a great time, a fun time, an anxious time. You want to find the right house, not make any mistakes, you have a lot at stake.
This is also a time that can be very stressful but if you know what to expect and you plan properly it will be a wonderful experience. I just love Sacramento First Time Home Buyers, the energy, the excitement and the thrill of it all makes it feel like drinking hot chocolate in front of the fireplace on a cold winter night or skiing down the slopes in Lake Tahoe while overlooking the Lake. Can you tell I just love Sacramento First Time Home Buyers?
First Time Home Buyers Steps, Part 1
Now for the meat…
First, you want to align yourself with a full time REALTOR® that is experienced and that you feel comfortable with. Its important to be honest with your REALTOR® and communicate with them so that they know what it is that makes-up your dream home. Write down what you would like your home to look like or have. Be realistic and keep your budget in mind.
Your Sacramento REALTOR® should be someone who listens and provides you with the best service. If they aren’t listening then you need a different REALTOR®.
Your experienced full time Sacramento REALTOR® will have a list of ethical, qualified professionals to help you during the home buying process as referrals.
The first professional that your Sacramento REALTOR® will suggest is a Mortgage Lender. Nothing can happen until you are PreApproved for a Loan. You don’t know how much of a home you can afford and neither does your Sacramento REALTOR®. Personally, although I have a Brokers license and can do loans, I choose not to. I feel that is a conflict of interest and focus on being the best Sacramento REALTOR® instead of having my hands in too many other professions.
This is a good time to discuss something that I feel very strongly about.
There are Sacramento REALTORs® who dabble in loans, I suggest that you don’t go in that direction. It is my opinion that this is a conflict of interest. When I use the word dabble, that’s exactly what I mean. You don’t want someone who dabbles. Home loans are a very important aspect of the home buying process that you will be stuck with. It is vital that you make a good decision and go with a qualified full time Mortgage Broker who focuses on mortgage loans on a regular full time basis and doesn’t dabble. Ask your Sacramento REALTOR® for a referral…they know who does a good job and who to avoid.
A good Mortgage Broker will sit down with you and go over your plans for the next few years to determine the type of home loan that would be best suited for you. At this appointment, the Mortgage Broker will ask that you bring with you the following:
- 2 years Residence History
- 2 years Employment History
- Check or credit card payment for any up front fees (maybe credit check, appraisal)
- Latest 2 months bank statements on all accounts
- W-2 (2 years) and current month pay stubs
- Self employed “ last 2 years tax returns
- Open loans/Current debts “ addresses, account numbers, balance & monthly payment
Real Estate owned “ loan number, addresses, balance & monthly payment (not for 1st Time Homebuyer)
When you provide this information to the Mortgage Broker, the Lender will have you fill out an application. This application must be filled out truthfully since any false statements are considered fraud and can result in a prison sentence. So remember, to fill out this application truthfully.
Once the application is submitted to your Mortgage Broker, they will run your credit history where three credit reporting bureaus will provide a report on how well you have paid all of your bills in a timely manner. You will be given a credit score by all three companies, Equifax, Experian and TransUnion (Let your Mortgage Broker pull your credit). The score that is in the middle range is the one that is used to determine your overall score.
This score is very important, it will be the result of whether or not you qualify for the best loan with the best terms. Paying your bills on time will never have been more important than it is now!
As a side-note that is important for you to know that within hours of your credit being pulled, the bureau sells your vital information on lists that are called Trigger Lists. Check out the article by Realty Times, the credit bureaus are selling your personal information to any Lender on the Internet that is willing to pay for your information. Be sure to Opt Out by calling 888.567.8688 or you may go on-line and opt out. You will have the option to opt out for 5 years or a lifetime. Remember, there are predators out there and they have a good sales pitch to try and get your business but you end up paying for it over and over and over. Remember, if it walks like duck, and smells like a duck and quacks like a duck, its a duck! Stay away from them!!!
Stick with the professional who doesn’t lower themselves to pay for your information in order to convince you to do business with them. Now, you are ready and armed with your Qualification letter from your Mortgage Broker who has met with you and has explained the process of the home loan as well as how much money will be needed in order to buy a house.
Depending on the type of home loan, will depend upon how much money you will need to have in order to buy a home. For further information regarding loans and some of the terms that are used as well as educating yourself on the type of loans be sure to read all the articles. Know the difference between an adjustable rate and a fixed rate, when to pay points and leveraging your money all these things are important and you need to understand them.
Real Estate Awareness is Empowerment BE Empowered
Oh, now that you know how much you feel comfortable spending and you have your letter of approval it is finally time for you and your experienced full-time REALTOR® to begin narrowing down your choices of neighborhoods. If you have a computer, your Sacramento REALTOR® will send you Sacramento homes for sale via your email for you to look through and make choices on what you like. It is best to limit the amount of houses to look at in a day.
Otherwise you start mixing up the houses and it gets very confusing. Typically, you should look at 3“5 homes a day and then if there are more that have peeked your interest and fall into your dream home category, save them for another day. Dont over do. This way when you make your decision, it will be a good decision that has come about because you have taken the time and made notes at each home visit.
Sometimes, the first house is actually the best house. I cant tell you how many times, Ive heard a Sacramento home buyer say, I hate to choose the 1st one without seeing all the rest.I understand that statement but I also understand and have watched Sacramento home buyers who wanted the first house but by the time they got back to it, someone else had already made the decision to buy it.
Its a very sad moment when that happens. So, I would suggest that if you fall in love with the first house, don’t delay it may not be there when you come back. If it was that great when you saw it the first time, other Sacramento home buyers will probably feel the same way. Even if you write an offer on the first house, you have 17 days to change your mind. But, if someone else made an offer, you are ought of luck on that one.
Be sure to read First Time Homebuyers Part 2 Writing an Offer part of a series for Sacramento First Time Home buyers.