Christopher Charbonnet

NMLS # 370097

985-888-1660

Chris@acemortgagela.com

Christopher Charbonnet Loan Originator

The Previously-Unwritten Manual to First-Time Home Buying

The Previously-Unwritten Manual to First-Time Home Buying

There are first times for everything. The first time you walked; the first time you rode your bike without falling; your first day of school; your first homework assignment; all up until your first real job.

There are firsts to buying a home, too. And it’s a pretty big first: Home buying is one of the most significant financial commitments you’ll make in your adult life.

Here’s the quick-start guide to become a smart, informed first-time home buyer. With this guide, your first experience buying a home will go better than some of those disastrous other first times in your life – such as the first time you tried to tie your shoes or the first time you tried driving a stick-shift.

Tip No. 1: Starting off on the right foot

Before you start your first home buying experience, here are two numbers to know right off the bat: Your credit score and how much of a down payment you can afford.

Credit score – Your credit score determines a lot about your home-buying experience, from what type of loan you can get and your options for down payments. Avoid unpleasant surprises at the mortgage office by checking your credit score using a free federally authorized online tool.

Down payment – How much money do you have right now in savings that you’d be willing to part with to make a down payment on the perfect home? Be prepared to depart with between 5 to 15 percent of the total cost of the home in the form of a down payment before buying – depending on your credit and veteran status.

Tip No. 2: Staying within your means

When selecting a few homes to check out, be realistic about what you really can and really cannot afford. You can get a general sense of what your estimated monthly mortgage will be by looking at the total sales price of the home and dividing by years then months depending on the length of the loan you want to get.

This way, you can avoid looking at home that are out of financial reach for you right now (as well as avoid the accompanying disappointment) and better use your time during the home buying adventure.

Tip No. 3: Knowing what you do and don’t want

It will also help the home-buying experience if you consider some of the key things you want out of the home you intend to purchase. Some of them are similar to what you would consider with renting an apartment, such as its distance from work or public transportation and the type of neighborhood in which it is located.

With a home, there are at least a few new things to consider you didn’t have to with most other living arrangements. For example, how important is it to you to have a garage? Do you want an accessible attic? Have you always dreamed of a big front (or back!) porch? This process is almost as important as assessing your financial state!

Know what’s a deal breaker and what’s not will make the home search – and eventual selection – much easier.

Tip No. 4: Know the basic terms

Being able to keep up with the Realtor and loan officers by knowing their lingo will make the home buying experience much easier to understand. Here are some key terms to know:

Pre-approval letter – The lender will let you know what home prices you’ll likely be approved for based on some basic information about your current financial situation.

Fixed-rate mortgages – A basic mortgage type that remains at the same interest rate for the life of the loan, usually ranging from 10 to 30 years.

Adjustable-rate mortgages – Similar to a fixed rate mortgage, except the interest rate can go up or down depending on the housing market.

Closing fees – Not only will you have to arrange for a down payment, you’ll also be responsible for a variety of closing costs – from the costs associated with home appraisals & inspections, to procuring home-owners insurance and any necessary legal fees.

Getting your questions answered

This is only a overview of course, and you’ll likely have more questions related to your specific situation. Since this your first time up-to-bat with mortgages, let us explain all the tricky stuff in a way that is simple to understand. Call us at (985) 888-1660, or set up an appointment online today!