Getting First Time Home Buyers Ready for the Home Buying Process

If you’re new to home buying, you’ve probably considered the steps in the home buying process. Sure, there’s a lot involved, but buying a home is much less intimidating when you know the information needed to make smart choices. In this blog, we’re sharing the steps you’ll take to buy your first home without worry. By the time you’re finished, you’ll have a clear understanding of what it takes to get the keys in your hand.

Browse our blog for more great info on home buying, including credit scores, debt and loan-to-value ratios, mortgages for the self-employed, and so much more. Today, we’ll begin by addressing how to mentally and financially prepare to buy a home.

Get your head in the game

The reason why you are buying a home is just as important as what you buy and how.

Far too often, people rush into homeownership, assuming that it’s a magic financial solution to their life’s problems. They may rush to buy a home they can’t afford and sign for a loan they don’t fully understand.

If you’re going to make homeownership work for you, it’s wise to consider your motivations and means.

Here are some good questions to ask yourself when starting your home buying journey:

• What are my realistic financial goals, and can homeownership get me there?
• Does it make more sense for me to keep renting, or is the market beckoning me to buy?
• How will homeownership impact my career, family, and other life areas?
• Am I aware of any potential risks involved?

Checking in with yourself and the people close to you can help you avoid making big mistakes when buying a home. Remember that a home is one of life’s biggest investments, so knowing what you’re getting into is vital. 

Three giant homeownership myths that will keep you stuck

Your local mortgage professional is key to helping you cut through the noise to become a successful homeowner.

If you choose to believe these myths without talking to a mortgage professional, you risk never getting your dreams off the ground:

• I need a pristine credit score. FALSE! There are government-backed loans with flexible credit score requirements.  Ask us about them!
• I need a 20 percent down payment. NOPE! A Home Ready loan only requires 3% down and a Federal Housing Authority home loan, for instance, only requires 3.5 percent down.
• I don’t make enough money and won’t qualify. REALLY? How do you know if you don’t apply?

One of our favorite things to do on the Hadley Team is shattering expectations by telling our clients, “you’re approved!”

You don’t need perfect credit, 20 percent down, or a million-dollar salary to purchase a home. Instead, it’s best to rely on an experienced mortgage team to light the way to what’s possible.

Now that you have a more realistic idea about what it takes to get a mortgage, let’s see if it makes financial sense to pursue.

Renters don’t build wealth like homeowners

When you rent an apartment, you’re helping someone else build wealth. Unfortunately, that someone isn’t you.

Here’s an example we like to give:

• If you spend $1,250 per month on rent for ten years, it totals $150,000. That’s one-third of a $450,000 mortgage, not including interest.

Think about that for a moment. In ten years, you could have paid for over 30 percent of a decently sized home loan. Instead, your landlord got that money, and you’re out 150,000 dollars.

By contrast, if you buy a home, you can:

• Build long-term wealth
• Potentially qualify for tax breaks
• Use the equity you earn for important life purchases

Sound appealing? That’s because owning a home places you lightyears ahead of where you would be if you were renting, especially when tax time rolls around. (Of course, consult with a tax professional for more specific information.)

But not so fast. Jumping into homeownership without preparation can be just as financially dangerous as not owning at all. Even more disastrous is believing myths that prevent you from getting started in the first place.

Bottom line: you can become a homeowner

Every day, we prove to first-time home buyers that they can get preapproved for an affordable mortgage. How can we show you what’s possible?

If you’re ready to leave your landlord behind and start building wealth, then we’re here to connect you with the perfect home loan to change your life. Contact Team Hadley to discuss your financial goals, and we’ll help get you there.