by Beth Frischmuth
AA first time home-buyer, according to the traditional industry standard, is one who has not purchased a home within the last three years. Programs for the first time home buyer come and go. There are a variety of programs available with different down payment options and your lender will explain the advantages and disadvantages of each. Keep in mind that there are additional costs incurred when purchasing a home such as closing costs, the cost of a home inspection and an appraisal.
If you are a first time home buyer, perhaps you have many questions you will want answered. So, let’s take the process of purchasing a home one step at a time. You probably have looked through real estate magazines and perused the internet for homes you are interested in. Now that you are ready to begin looking, you will want to select a Realtor® and a lender.
Find a Realtor®
As a buyer, it costs you nothing to be represented by a Realtor®. A Realtor® will represent your interest and take you through the entire process from writing an offer to being by your side when you sign the final documents at closing. Ask family and friends for recommendations. It is a good idea to interview several, preferably face to face. Your Realtor® should be one who is working real estate full time and has been in the industry long enough to have gained experience and expertise or be backed by a team or brokerage that is available for support.
Questions for a Realtor®
- How long have you been in the real estate industry?
- Is real estate your full time profession?
- Are you typically available on your cell phone?
- How many houses have you sold in the last six months?
- How many listings do you have?
- What is your availability?
- May I call you in the evening?
- May I view properties on the weekends?
- If you are not available is there someone else who can help me?
Find a Lender
Choose a local lender if at all possible. Your Realtor® will most likely have recommendations of lenders he or she trusts and has worked with in the past. It is a good idea to interview several, preferably face to face, before making a final decision. Do not allow lenders to check your credit score until you have decided whom you will use.
Questions for a Lender
- How long have you been in the mortgage industry?
- Do you have an assistant?
- Can I reach you if I have questions?
- What type of loans do you offer?
- Who will service my loan, your company or another?
- What are your fees? How does that work? Are they negotiable?
- What do you need from me?
- How long will the loan approval process take?
- What can I do to speed up this process?
- How long will it take to close the loan?
- Is there a prepayment penalty for prepaying the loan?
- After locking my interest rate, how much time will I have to close?
- What happens if we need more time? Is there an extra cost for this?
Timeline for a Loan & Getting Pre-Approved
Your Realtor® will want to know that you have been pre-approved for a purchase before you begin viewing homes. Your lender will give you a timeline for obtaining the loan and a list of “dos” and “don’ts” which will be similar to this list provided by Pacific Residential Mortgage:
Do Save and Provide:
- Your most current pay stubs
- Last three years of federal tax returns
- W-2’s/1099’s and other income documentation
- A complete and final copy of divorce decree, if applicable
- Identify current debt including creditor’s name, monthly payment and balance
- Information on any derogatory credit, judgments or liens
- Most recent asset statements including: bank, brokerage, mutual funds and retirement accounts
- 60 days seasoned liquid assets for funds to close
- Gift fund documentation including: proof of donor’s ability to gift, gift letter, copy of gift check and proof of gift deposit
Don’t Do Before or During the Loan Process:
- Quit or change jobs
- Increase current credit balance
- Open, close or apply for any new credit accounts
- Dispute any items on your credit report
- Forget to make your payments on time
- Transfer or deposit large sums of money
- Make any cosmetic or structural changes to the property
Now that you have a Realtor® and a mortgage lender, you are ready to begin your search for a home. These two partners will take you through the entire process of your first home purchase from beginning to end and be there to answer your many questions. When being represented by two knowledgeable professionals your journey should be worry-free and rewarding.
Contact McMinnville Realtor® Beth Frischmuth at 971-237-1800 to learn more about real estate in McMinnville.