5 Things Every First-Time

Homebuyer Must Know

1 - Prepare For Loan Requirements

• Bank statements: Your lender will need to see funds coming and going from your bank account up to 3 months back. You may also be asked to provide statements for any retirement, stock, and bond accounts to show other sources of income and your employment income. 
• Proof of funds: A POF is a lender-issued document showing how much money a person has to cover the purchase costs. This shows the seller that you can cover all of the costs associated with a home purchase. 
• Pre-approval: Your lender will provide you and your agent with a pre-approval letter that shows the loan amount you qualify for.

2 - First-Time Homebuyer Programs & Grants

Many lenders and federal or local housing agencies offer programs for first-time homebuyers to assist with the down payment and closing costs. Depending on your income, you may qualify for grants or forgivable loans! Be sure to ask me about this possibility if you think you could qualify. 


3 - Determine Your Wants vs Needs

Before you start your house hunting, consider what features are essential and which you can do without. With this information, you can weed out the homes that don’t meet your criteria while simplifying and speeding up the search process. Some things to consider: 

• House size: Know how many bedrooms and bathrooms you absolutely need. 
• Property size: Do you need a big backyard for your pets or a space to build an ADU in the future? How much landscaping maintenance are you prepared to do?
• Features: Decide if you need your home to be move-in-ready, or if you have time and funds to develop the home to include all of the features you want. 

4 - Prepare For The Additional Costs

Closing costs: Generally, closing costs range between 2-5% of the loan amount and are paid on the day you close on the property. 
Property taxes: When you close on the home, you will be charged a prorated amount of the home’s annual property tax for the remaining period of the tax year. 
Homeowners insurance: Before your lender will let you take out your mortgage, you’ll need to provide proof of homeowners insurance. Homeowners insurance can be paid annually or monthly, but you’ll need a paid policy in place before closing.
Moving costs: Your moving costs will vary depending on how much you need to move, how far you are moving, and if you need to move items that need special care, such as a piano. If you plan on a DIY move, be sure to factor in costs for a moving truck, packing supplies, boxes, etc.


5 - Remember To Budget For Home Maintenance 

As a homeowner, you’ll need to invest in regular home maintenance for the property to sustain or grow in value. Homes require regular maintenance. Think about what services you’ll hire to care for your home (gardeners, tree trimmers, gutter cleaning, handy-work etc.) and create a budget for each monthly service. Also plan for larger projects such as: HVAC, appliances, plumbing, water heaters, etc. Set aside a proper budget for these maintenance costs so that your wallet won’t be surprised when funds are needed.