Buying for the first time? I can help!
Buying your first home might seem like an intimidating process to get started, but with a little knowledge and preparation, it can actually go pretty smoothly! Here's what you need to know about buying a home in the Crofton area. Have specific questions or ready to get started? Contact me at any time!
Understanding Your Mortgage
Almost every buyer will need some type of loan, but sadly, many buyers don't know much about them—or even that there are quite a few options out there. I'd recommend connecting directly with a local Crofton-area lender or agent to find out more about what options you might have. But in the meantime, here's a brief overview of some of the most common types of loans used by Crofton home buyers.
Common Mortgage Types
Conventional loan
This is a standard, lender-issued loan typically used by buyers with excellent credit, solid financial history, and a 10% – 20% down payment.
FHA loan
These are most often used by buyers who cannot meet a 10% down payment, as they offer financing with down payments as low as 3.5%. They also often allow for more flexible credit and financial qualifications.
VA loan
The VA loan is available to most active, veteran, or retired military personnel and their spouses. The VA loan allows buyers to purchase with 0% down, and may offer more flexible credit and financial qualifications.
USDA loan
Targeted to buyers with low to moderate income, the USDA loan offers up to 100% financing and below-market interest rates. The loan is only available to buyers in specific rural areas, so be sure to check the availability map.
What Do Mortgages Include?
There are four main components to a mortgage payment, often abbreviated as "PITI".
Principal
This is the repayment of the initial amount you borrowed from your lender (in other words, the price of your home).
Interest
This is a payment to the lender for the money you borrowed. It's calculated out for the length of your loan and paid each month.
Taxes
Your property's annual city and county taxes are divided by the number of mortgage payments you make in a year and added into your mortgage.
Insurance
Like taxes, your annual homeowner's insurance premium is divided up into each monthly mortgage payment and paid to your lender.
Consult Your Finances
It goes without saying that buying a home is a big investment. Though it promises security, and the feeling of truly being a part of a community, it involves a lot more work than simply renting. When you rent, you have a landlord to fall back on in case of expensive repairs or home maintenance issues. When you own the home, you're responsible for its upkeep. So it's important to thoroughly do your research, budget, and ensure that you're financially ready to purchase.
If you're unsure, I'd recommend meeting with a few lenders or financial advisors to discuss your current financial situation and get a better idea of where you stand on the road to homeownership.
Finding an Agent & Going Home Shopping
Once you've got your finances sorted, you're just about ready to start the fun part—home shopping! First, though, you've got to find an agent.
Find an agent in Crofton
As a first-time buyer, it's immensely important to work with an agent. There are a lot of steps in the process of buying a home. There are many easy-to-overlook details, a lot of fine-print contracts, and quite a number of big decisions to make. As an inexperienced buyer, you want to have all the help you can get to ensure you're making a smart financial and personal decision, and to ensure you're getting the best possible deal. And that's where you agent comes in. A good agent can walk you through the process, step by step, offering advice and assistance along the way.
Shop homes for sale in Crofton
The part every buyer looks forward to: home shopping! Nowadays, we have such good online home search tools, almost all of your shopping can be done from the comfort of your couch! Just be sure to take some time to think about what's really important to you in a home—like its location, its size, and its features. Try to keep your search fairly narrow to avoid getting burned out looking at or touring homes that won't work with your lifestyle or budget. If you don't see what you're looking for right now, sign up for our listing alerts to get notified when your dream home is available!
Making an Offer
Congrats—you found a home you love! Next, you've got to make an offer, negotiate with the seller, and (hopefully) sign a purchase agreement to go undercontract!
What happens during the offer?
Offer & negotiate
You and your agent will discuss the terms of your offer (like the price and any contingencies) and present it to the seller as an official document. The seller might accept your offer, they might reject your offer, or they might issue a counter-offer with modified terms or conditions.
Complete due diligence
Most home buyers will include a variety of contingencies in their offer—like a home inspection and appraisal. Should the seller accept your offer, you have a set period of time, called "due diligence" to complete any requested inspections, surveys, appraisals, and other checks.
Renegotiate
Should your due diligence research unearth any potential issues, they may be addressed with the seller. For example, if your inspector uncovers a serious maintenance issue, you might ask the seller to repair the issue or cover the cost of you repairing it.
Closing the Sale
You got through the home inspection, renegotiated with the seller, and now everything looks good! You're ready to finalize your mortgage, sign some paperwork, pay your closing costs, and get the keys to your new home!
Finalize your loan approval
Next, you'll be working closely with your lender to ensure that all necessary paperwork is completed and submitted. Your lender may ask for very specific and detailed financial information, and it might seem a little tedious... but it just means your lender's making sure you're ready to take on the hefty responsibility of a mortgage!
Pay your closing costs
On a predetermined day, you'll sit down with your agent, attorney, and lender, along with the seller's representatives, to sign any remaining paperwork and pay your closing costs. You should be given the total amount of your closing costs a few days ahead of the close so you can with draw a cashier's check or have the money wired to your lender.
Get your keys!
At last! The keys to your very first new home! Congratulations—you just bought a house!