How to Buy a House: Steps to Buying a House for the First Time: #Massachusetts #MABA #HomeOwner #RealEstate

 Want to know how to buy a house? Naturally, the steps to buying a house for the first time might seem complicated particularly if you’re a home buyer trying to purchase real estate with no prior experience. Between down payments, credit scores, mortgage rates (both fixed-rate and adjustable-rate), property taxes, interest rates, and closing the deal, it’s easy to feel overwhelmed. There’s so much at stake with a first home! Still, if you familiarize yourself with what it takes to buy your first home beforehand, it can help you navigate the real estate market with ease. So let’s get started!

Ready to buy a house? Follow these steps to buying a house for the first time

 In this step by step guide, you’ll learn what it takes to buy your first home, from beginning to end. Whether it’s your first time in the real estate market or you’re an experienced homeowner who wants to brush up on your skills, this is everything you need to know about how to buy a house.

Step 1: Start gathering a down payment

 One of the most important steps to buying a house for the first time? Figure out your finances. Buying a new home (particularly for the first time) requires a mortgage, where a lender fronts you the money and you pay it back over time. However, in order to get a mortgage, you’ll need some sort of down payment. So how much do you need?

 Ideally a down payment on a mortgage should be twenty percent of the home’s price to avoid added fees, but if you don’t have that much of a down payment, don’t worry. A mortgage down payment can be as low as ten percent, five percent, or even zero percent for certain types of mortgages (e.g., VA loans or a USDA loan).

 If saving up a downpayment is a real challenge, find out everything you can about government programs. A HUD home is a property owned by the U.S. Department of Housing and Urban Development. They require lower down payments for eligible participants, and often sell at below market prices.

Step 2: Check your credit score

 Did you forget to pay off a couple of credit cards? Unfortunately, it’ll affect your credit score. In addition to having a down payment, a first time home buyer will need a decent credit score. This three digit number is a numerical summary of your credit report, a detailed document outlining how well you’ve paid off past debts like for credit cards and college student loans. A lender will check your score and report in order to estimate the odds that you will deliver your monthly payment, too.

 In turn, the lender will use this info to decide whether or not to loan you money, as well as how much and at what interest rate. If a lender sees some late payments on your credit cards or other blemishes in your credit report, this can lower your odds of getting a loan with a great interest rate, or perhaps even jeopardize your chances of getting any loan at all. So it’s essential to know your credit score, and take steps with those overextended credit cards and high-interest debts to bring your credit score up to snuff. Here’s more on how to check your credit score and what number is best to buy a first home.

———

Watch: 3 Things You Should Never Say When Buying a Home

———

Step 3: Get pre-approved for a mortgage

 Another one of the most important first-time home buyer steps? Seeking pre-approval from a lender for a home loan. This is where you meet with a loan officer, ideally a few at various mortgage companies. Each mortgage lender (LendingTree is just one example) will scrutinize your financial background such as your debt-to-income ratio and assets and use this info to determine whether to loan you money, and what size monthly payment you can realistically afford.

 This will help you target homes in your price range. And that’s good, because a purchase price that’s beyond your financial reach will make you sweat your mortgage payment and puts you at risk of defaulting on your loan. As a buyer, just keep in mind that mortgage pre-approval is different from mortgage pre-qualification. Pre-qualify, and you’re undergoing a much simpler process that can give you a ballpark figure of what you can afford to borrow, but with no promise from the lender.

 Getting pre-approved is more of a pain since you’ll have to provide tons of paperwork, but it’s worth the trouble since it guarantees you’re creditworthy and can truly buy a home. Before they even meet with a lender, one step home buyers can take to begin understanding what they can afford as a monthly mortgage payment is to plug their info into an online home affordability calculator. This will calculate the maximum amount you can afford as a monthly payment.

Step 4: Find a real estate agent

 Want a trusty home-buying guide by your side? Most first-timers will want a great real estate agent specifically a buyer’s agent, who will help them find the right houses, negotiate a great real estate deal, and explain all of the nuances of home buying along the way. The best part? The agent’s services are free to first-time home buyers (because the seller pays the sales commission). Here’s how to find a real estate agent in your area. Note: There is a subtle difference between a real estate agent and a Realtor^®; the latter is a member of the National Association of Realtors® and adheres to a code of ethics. Consider having a Realtor additional insurance that you’ll get the help you need to ace the process.

Step 5: Go shop for a home!

 This is the fun part! As a home buyer, you can peruse thousands of real estate listings on sites such as realtor.com, then ask your agent to set up appointments to see your favorites in person. Since the sheer number of homes can become overwhelming, it’s best to separate your must-haves from those features you’d like, but don’t really need. Do you really want a new home or do you prefer a fixer-upper? Make a list of your wants and needs to get started, and whittle down your options.

Step 6: Make an offer

Found your dream home? Then it’s time to make an offer to the seller.

Here’s more on how to make an offer on a house that a seller can’t refuse.

Step 7: Get a home inspection

 A home inspection is where you hire a home inspector to check out the house from top to bottom to determine if there are any problems with it that might make you think twice about moving forward. Think: termites, faulty foundation, mold, asbestos, etc. Sure, a lot can go wrong, but rest assured that most problems are fixable.

Step 8: Get a home appraisal

 Even if you got pre-approved for your home loan, your lender will want to conduct a home appraisal. This is where the lender checks out the house to make sure it’s a good investment. It’s similar to a home inspection, but for your lender. Here’s more about how to buy a house and the home appraisal process and what to expect as a buyer.

Step 9: Head to closing

 Closing, which in different parts of the country is also known as settlement or escrow, brings together a variety of parties who are part of the real estate transaction, including the buyer, seller, mortgage representative, and others. Closing is the day you officially get the keys to your new home and pay all the various parties involved. That will include your down payment for your loan, plus closing costs, the extra fees you pay to process your loan. Closing costs can be sizable, averaging anywhere from two percent to seven percent of the home price.

Here’s more on closing costs for home buyers.

Step 10: Move in!

 Done with closing? Got your loan? Congratulations, you’ve officially graduated from a home buyer to a homeowner! See, the long-term process of buying a first home wasn’t so scary after all, right? Now it’s time to kick back and enjoy the many benefits of becoming a homeowner.

The post How to Buy a House: Steps to Buying a House for the First Time appeared first on Real Estate News & Insights | realtor.com®.

First Time Home Buying in Massachusetts

MABA Buyer Agents help first time home buyers reduce the stress and frustration normally associated with buying a home or condo – especially for first time home buyers.

As a first time homebuyer in Massachusetts, you can turn to our non-profit organization to help you understand and navigate the complexities of the entire Massachusetts real estate transaction, from mortgage pre-approval until you are handed the keys to your new home or condominium. Each of our member buyer's brokers and agents works only for their buyer-clients and never for the seller of the home or condo that their buyers want to buy.

MABA Buyer Agents will take the time to learn about you and your real estate goals, help you understand your options, including first time home buyer programs, properties and/or condominium associations, estimate real property values and put together a negotiating strategy to help you increase the odds of getting your offer accepted in our competitive Massachusetts real estate market. After advocating to get your offer accepted, your MABA buyer's agent will be there for you at your home inspection and help you protect your deposit through the inspection, purchase & sale and financing contingency periods.

You can buy your first home or condo with confidence knowing that your MABA buyer agent is committed to saving you time and money and helping you make your best home buying decision.