A home is one of the biggest purchases a person makes and being a first-time homebuyer is an exhilarating experience! While exciting, the process of homebuying can also be overwhelming with all these new terms and processes.
At Brenner Poole Homes, we want the homebuying process to be as easy and stress-free as possible for our first-time buyers. We hope this first-time buyer guide helps to make that possible!
Determine how much you can afford
The first step to buying your first home is determining how much you can afford. Buying a home is expensive as it is, but include HOA fees, taxes and insurance, and the costs add up even more. You also want to leave room in the budget for other things you may need for your home once you have moved in. Generally, try and make sure your monthly housing costs are no more than 25% of your monthly gross income. Make a list of your housing costs and be sure to allocate for annual property taxes, mortgage interest rates, homeowners insurance and other fees. Add up these expenses and input them into a home affordability calculator to determine your homebuying budget.
Save for a Down Payment and Closing Costs
Most homebuyers do not pay the full price of the house upfront, but instead, put down a down payment of at least 20% or more. Even then, that 20% is a large portion, so saving up is likely necessary. Luckily, there are numerous ways to save up for a down payment. Consider putting a fixed amount into savings each month, reducing expenses or seeking down payment assistance. Check out our blog, 10 Ways to Save Up for a Down Payment, for more money-saving tips. In addition to a down payment, first-time homebuyers will also want to save for closing costs, which usually average 3 to 4% of the cost of the home.
Get Pre-Approved for a Loan
If the cost of a down payment seems out of reach, do not be afraid to apply for a loan. From FHA loans to VA loans, there are several options that offer little-to-no down payment. First-time homebuyers looking to buy in Tennessee should also look into the Great Choice Home Loan. Created by the Tennessee Housing Development Agency, this loan program helps make homeownership available and affordable to Tennesseans of middle/moderate incomes. The loan includes a 30-year term, fixed interest rate and interest-free down payment money to qualified homebuyers. To get pre-approved for a loan, talk to a mortgage lender. With them, you will verify your financial information and submit your loan for preliminary underwriting. Having this pre-approval not only sets you up for full approval but also shows that you are a serious homebuyer.
Find Homes in Your Price Range
Now that you have a price range set, begin looking for homes within it. If you need a bit of help doing this, consider working with a real estate agent. You will be able to give them an idea of the kind of home you want so that they know what you are looking for. From there, they can take that information and put it into a multiple listing service to find a home that meets your criteria. Your real estate agent will also be able to provide you with valuable market expertise and help you to get the best deal.
Research Neighborhoods and Communities
While the home is important, it is important to consider more than just the property before buying. Think about what matters most to you when it comes to a neighborhood. Contemplate factors such as distance from work and schools, crime rates, walkability and things to do in the area. If using a real estate agent, they should be able to give you insights and statistics. Consider amenities within the community that you would enjoy having such as a pool, clubhouse, tennis courts or walking trails. Make sure to do your own research, too to find a home and neighborhood that is the right fit for your family.
Take a Tour
Once you have narrowed down a few homes or floor plans, it is time to see them in-person. Contact the community sales manager to set up an in-person or virtual tour of the home or a similar model. Be sure to think long term and if the plan of the home and features within it are something that will fit your needs now and later down the road.
Time To Buy
Once you have chosen a home or a home plan, it is time to buy! Read through the paperwork thoroughly, sign what you need to sign, prepare yourself for closing and get ready to move into your new home!
Looking for your first Tennessee home? Our collection of new townhomes at Spring House at Honey Farms is perfect for first-time homebuyers with plenty of floor plan options, included features, energy-efficient construction and a low-maintenance lifestyle. To learn more about living the sweet life, visit www.HoneyFarmsLiving.com.