CME CU understands buying your first or looking for your next home is a big decision. With advice and services, we are here to help during this exciting time and give you the confidence you will need to make the right decision for you and your family.
Buying a home remains one of the American dreams. As a first-time buyer, you have access to programs, tax breaks, and federally backed loans. A first-time homebuyer is someone who:
Now the fun starts, finding your home. There are lots of places to look so make sure you take full advantage of the options you have to find your home including a buyers real estate agent, searching for listings online, and driving around the neighborhoods you are interested in. It you are a first-time homebuyer, look for a home you can add value to and give you a chance to improve the equity in your home as you make your home improvements.
Whether you are buying or refinancing you have a variety of choices to finance your home and first-time home buyers have even more options that will help you get into a home. The FHA or Federal Housing Authority offers programs geared towards home-owning novices and other first-time homebuyer programs offer down payments as low as 3% to 5% (vs. the standard 20%).
Once you find your home its time to make an offer. Your real estate agent will help you decide how much money you might want to offer, along with the conditions you want to ask for. Your agent will present your offer to the seller who will either accept it or issue their counter offer. You can then accept or continue to go back and forth until you both reach an agreed price.
Once you reach an agreement, you'll make a good-faith deposit and the process then transitions into escrow. Escrow is a short period of time (often about 30 days) during which the seller takes the house off the market with the contractual expectation that you will buy it.
Even if the home you plan to purchase appears to be flawless, there's no substitute for having a trained professional do a home inspection to qualify the quality, safety, and overall condition of your potential new home. Bottom line is you don't want find out when you own the home there are a lot of unexpected repairs that need to be done. Most offers are contingent on the home inspection and if serious defects are identified, you'll generally be able to rescind your offer and get your deposit back. It also gives you leverage to have the seller make the repairs or reduce the selling price.
Once the price is worked out and the inspection comes back with no problems, you should be ready to close. Closing involves signing the purchase and mortgage paperwork that say you own the property. You and your lender will work through the final stages of your purchase including a home appraisal a title search to make sure that no one other than the seller has a claim to the property and completing the mortgage paperwork. The cost for closing may include loan-origination fees, title insurance, surveys, taxes, and credit-report charges. Your lender would have disclosed these to you when you applied for your loan and became prequalified.
You have signed the papers, paid the movers, and your new place is starting to feel like home. With home ownership comes major unexpected expenses, such as replacing the roof or getting a new water heater. Start an emergency fund for your home so that you won't be caught off-guard when these costs inevitably arise. Regular maintenance can decrease your repair costs by allowing problems to be fixed when they are small and manageable.