7 Things Every First Time Home Buyer Should Do When Buying a Home

The home buying process can seem overwhelming at first when you have never gone through the process before.  However, when home buyers can break down the buying process in to smaller tasks the process becomes much more manageable.  Below will find seven things that every first time home buyer should do before buying a home to make the process much easier.

1. Shore up Your Credit: ideally first time home buyers want to have their FICO score over the 640 level.  So take the time necessary to pay down high credit balances, make all payments on time, and remove any derogatory items from your credit report so you can get the highest score possible when purchasing a home.
2. Save for a Down Payment: first time home buyers need to have some funds saved towards a down payment on a home.  The minimum down payment on an FHA mortgage at this time is 3.5% which means that on a $100,000 home a home buyer will need to have $3,500 saved.  There will also be closing costs for a home purchase and a buyer needs to have funds ready for these costs as well.
3. Look for Down Payment Assistance Programs, if needed: there are several down payment assistance programs out there for qualified home buyers.  Contact your mortgage lender for guidance on how to find these programs and also contact the Housing Department in the city where you live to see if they are familiar with the down payment assistance programs that operate in your area.
4. Organize your Documents: get your financial house in order by organizing your asset and income documents in to one file to have it ready for the mortgage lender.  Don’t leave this for the last minute.
5. Set a Budget: decide on what you want to spend each month on a mortgage payment based partly on what you pay now for rent and what you can afford based on your income.  The mortgage lender will have guidelines on income and debt to income ratio limits that borrowers must meet but be prepared before your lender meeting with an idea of your monthly budget and what you can reasonably afford to pay for a monthly mortgage payment.
6. Get Pre-Qualified: home buyers need to be pre-qualified before they seriously begin shopping for a home.  A Realtor will not show a home buyer houses until they know just how much home you can afford.  Having a pre-qualification letter also shows a Seller when you do make an offer that your offer is serious and you are financially qualified to buy their home.
7. Find a Realtor: when you have completed all of the steps above you are ready to get serious about looking for homes.  You know where you want to live because you have researched the neighborhood and you know what you can afford because you got pre-qualified by your mortgage lender.  Now, get out and start looking for a home.

I find that those home buyers that start the process early, stay organized, and take good notes when they meet with lenders, realtors, sellers and others have the most success when buying a home.  If you follow the steps above this will give you a good starting point to achieving your home buying goal.