For First-Time Home Buyers: First Things First

So youve finally made the decision to join the ranks of Americas homeowners. Congratulations! Home ownership can be very rewarding and satisfying. But its a long and winding road to get from that decision to actual ownership. And it can be filled with unknown twists, bends, and even potholes that can hinder and discourage you along the way. Our purpose today is to help you get started on that road to your new home in as safe and efficient a manner as possible.

Contrary to what you may be thinking, the first step to buying your dream home is not rushing out and finding a house that you love. In actuality, the first step to a smooth and successful first-time home purchase is to study. Gather as much information as you can about the home-buying process. Take some time to become familiar with what you will be required to do, how the process will proceed, what sellers and lenders are looking for in a prospective buyer, etc. Knowing what to expect will make you much less uncomfortable and anxious as you move along the road toward the actual purchase. And besides, having good information will always makes it easier to make good decisions.

The second thing youll want to do is to take stock of your credit health. Know your credit score and whats in your credit file. If you have some derogatory entries, as many people do, dont panic or give up. Do what you can to clear them up. One of the very best ways to keep your home ownership costs down is to have good credit. If it takes some time for you to repair your credit profile, thats okay. The money that youll save in the long run will be well worth the time and effort that you make in this area. If you cant wait, dont worry; there are many home-buying programs for people with less-than-perfect credit, too.

Once youre comfortable with your credit record, begin talking to lenders about prequalifying for a mortgage loan. Have you noticed that we havent even begun to look for your new home yet? Theres really no point in finding a house that you love, only to be hit with the realization that you cant qualify for the loan that it would take to purchase it. When you prequalify, youll know exactly what your financial situation is; your target price range, the amount of down-payment money youll need, monthly payments, and the like. In other words, youll know what you can comfortably afford. This can save lots of time and unnecessary effort when shopping for your new home, and can also help keep you focused during negotiations. Our How Much Income do I Need in Order to Qualify Calculator can also help you to gauge your financial position.

Now that youve arranged financing, youll need to determine the size and type of home that will fulfill your needs and be affordable to you. If youre not familiar with your local area, contact a Realtor. They can give you valuable information about local neighborhoods, schools and shopping, churches and hospitals, etc. You may even want to hire a Realtor as your representative. This is called having a buyers agent. Many people, and not just first-timer buyers, are under the impression that the nice real estate agent who drove them around to look at various houses represented them. Nothing could be further from the truth. That agent (who owns those real estate listings) has a fiduciary responsibility to the home seller, not the buyer. He or she is legally bound to act in the best interests of the seller. And the sellers best interests are not always going to squarely align with your own. Getting your own agent to contractually represent your interests is therefore something to consider.

Theres plenty of available information that can help guide you in more detail further along the path to home ownership. One good source is The First-Time Homebuyers Guide. Take a look at it; do your homework. Because the next step in the home-buying process is where the real fun begins: making your first offer. Good luck!