8 Steps to Successful First Time Home Ownership

2012-01-22T12:13:00.000-08:00

1. Home Buyer Education. This should be the first step prior to making any large financial expenditure, and especially, first time home ownership. So get educated. Go to www.hocmn.org (Minnesota Home Ownership Center) and locate one of the many non-profit organizations near you that offer Home Stretch® (education for first time home buyers) and home ownership counselors. Alternatively, visit our website at www.1sthomenetwork.org and receive the same services under one roof.

2. Buy First Home Right. What a mortgage lender says you can borrow may not be affordable for you. What’s the difference between being approved for a mortgage loan amount and personal affordability? The difference is understanding how, where and on what you spend your money; your personal and financial goals; and your comfort level with a certain monthly housing expenditure. A household budget that incorporates future goals is critical and absolutely necessary to this determination. There are a lot of budgeting tools available that can help with this step.

3. Shop for a Mortgage Loan. Contrary to popular belief, this is not the first step toward successful first time home ownership. Accomplishing Steps 1 and 2 above, then visiting with many mortgage lenders (both loan officers and brokers) is the best way to get a good idea of the various mortgage loan programs that may be available to you. For first time home buyers, there may be some free money available.

4. Shop for a First Home. Do your homework first. In other words, know how much you can afford to spend (Step 2) and how much you are approved to spend (Step 3). It’s always a good idea to determine what’s important to you in a home. For example, all these factors are important considerations in purchasing a home: location, single family or condo, floor plan, and/or the school(s) you want your children to attend. Additionally, these and other considerations effect your choice of real estate professional which should be based on your needs and wants.

5. Negotiate a Purchase Agreement. Your real estate professional will also help you with this step. However, you need to be familiar with this document. It is a written offer to purchase a home under certain terms and conditions and, if approved by the seller, becomes a contract with legal consequences. Negotiations regarding purchase price and other conditions are often involved. As one of my law professors was fond of saying, it’s easy to get into things, and often difficult to get out. So know your rights.

6. Obtain a Home Inspection. A professional home inspection by a licensed home inspector helps you identify unseen physical problems that may or may not cause you to have second thoughts about purchasing the home. This is where you as a buyer should adhere to the saying “buyer beware.” A home inspector will help you became aware of what you should know about the home before you buy it.

7. Finalize Mortgage Loan Application. Go back to your selected mortgage lender and provide them with the purchase agreement. They will order an appraisal of the property to make sure it is worth the amount of the loan. The terms of the loan will be finalized and you will be given a set of instructions on how to stay qualified for the loan. A multitude of small changes in your financial situation could cause you to no longer be qualified for the loan. Talk with your mortgage lender when in doubt regarding any planned financial activity.

8. Close on Mortgage Loan. This is the meeting where transfer of the property from the seller to you will occur. You may want to exercise your writing hand prior to the meeting, because you will be signing a lot of documents. After you sign, you own the home so be prepared to claim your new home. Congratulations, you are a first time home buyer.

Please note, that the main steps to home ownership are described above. However, there are many nuances and considerations to each step and you should be aware of all of them. So take the Home Stretch course to become fully educated about becoming a first time home buyer.

For information purchasing your first home of the schedule of Home Stretch courses, contact ows.firsthomenetwork@gmail.com or visit our website at www.1sthomenetwork.org.

The First Time Home Buyer

8 Steps to Successful First Time Home Ownership