Updated: Aug 12, 2019
Excited and ready to buy your first home? The first thing you want to do is gather the right team. Yes, the process of home buying involves a team of advocates in your corner looking out for your best interest. All members involved in your home buying process will be vital in acquiring your new home.
You will first need a good realtor who will find the home that’s right for you and your family, and then negotiate with the seller on the listing price to get to a number you can afford. Next you will need to find the right mortgage broker. A broker will communicate with the realtor on the price of the home, and will then negotiate with the lending company to get you approved at best interest rate possible.
But don’t forget, this all starts with having a good credit score. With the right credit score
you may be able to get into your home with little to no money down, plus having your closing
cost taken care of by either the broker, the lending company, or maybe even the seller.
Remember, the better your credit score, the lower your interest rate, resulting in monthly
payments you can manage.
Just make sure you home “shop” within your means. Keep your home buying modest.
Both your realtor and broker will ensure that the home you and your family move into is the
home you can afford even in the most dyer or circumstances, such as a downward shift in
income, a surprise costly repair, or a sudden change in the market and you find your property taxes or insurance rates going up. These are things your team has already considered, but they are things you will want to keep in mind as well when you are shopping.
There are many county, state, even national programs that can assist you with your
down payment, closing costs, realtor and/or broker fees, and any other fees associated with
home buying. However, make sure you do your research and be sure to discuss any of your
finding with your home buying team. There are many programs that look promising to partake in, only to leave you with “buyer’s remorse”. One such program would be a second
mortgage assistance program. People may consider obtaining a second mortgage to avoid PMI (private mortgage insurance), however this type of mortgage will do exactly what the name says it will do, add a “second mortgage” to your home, leaving you now paying two mortgages.
And be sure to understand your choice in interest rates: a Fixed Interest Rate – (ensures your interest rate stays constant for the duration of the loan); vs. a Floating Interest Rate – (also called a “variable interest rate”, can fluctuate over the duration of the loan depending on the overall market, an underlying index, or with prime rate). The primary advantage with a fixed interest loan is once the loan is finalized, the value of future interest payments in known and will remain the same.
Again, the right team in your corner is vital in the success of acquiring a home for yourself and your family.