There is a lot to consider as you prepare to buy your first home — from budgeting to finding the right property, securing a mortgage, and finally closing on your new home.
When it comes to the home loan process, having a local mortgage broker on your side who can help you understand the steps and ensure you make a smart financial decision for you and your budget.
To simplify this journey and help you confidently navigate each step, we are sharing a step-by-step guide for first time homebuyers. And once you are ready to get started, contact our team at Brandywine Valley Mortgage.
1. Review Your Finances
Before you start searching for homes, it is important to understand not only what you can afford to borrow but also what you can afford to spend on monthly mortgage payments. Sit down first to calculate all your monthly expenses and see how a mortgage payment could fit into your budget.
2. Check Your Credit Score
Your credit score plays a big part in the mortgage approval process and ultimately can impact your interest rate. Make sure you know your credit score and, if necessary, take steps to improve it. This means paying down credit cards, minimizing existing debt and checking to make sure your credit report is accurate.
3. Get Pre-approved for a Mortgage
A pre-approval letter from a lender like us at Brandywine Valley Mortgage could give you a leg up when house hunting. This process reviews your credit history, income, assets, and liabilities to determine exactly how much you can afford as you explore homes on the market.
Getting a pre-approval letter from Brandywine Valley Mortgage gives you an advantage as you search for the right property to make an offer on. In a competitive market where homes often receive multiple offers, sellers prioritize buyers with solid financial backing, and a pre-approval letter does just that.
It signals to the sellers that your offer is credible and that the purchase will not fall through due to inadequate financing.
4. Find A Real Estate Agent
Working with a professional real estate agent can help you navigate the West Chester housing market and find homes within your budget and that meet your needs. They will provide expert guidance on making an offer and negotiating with sellers to ensure you get the best possible deal. Together, working with a knowledgeable real estate agent and local mortgage broker can streamline the home-buying process and make it stress-free.
5. Begin House Hunting & Make an Offer
Using your pre-approved mortgage amount and your wishlist, begin viewing properties. Remember to consider not only the floorplan and aesthetics but also the home’s location, neighborhood, and proximity to essentials like schools and shops.
Once you find a home you love, your real estate agent will help you make a competitive offer at a price you have been pre-approved for.
6. Home Inspection and Appraisal
When buying a new house, it is important to have it inspected to ensure that it is in good condition. A home inspection typically includes a review of the house’s structural integrity, electrical and plumbing systems, and overall safety.
On the other hand, an appraisal is ordered by a mortgage lender to determine the home’s market value. The appraiser assesses the property’s location, size, condition, and comparable sales in the area to come up with a fair market value. Both a home inspection and an appraisal are crucial steps in the home-buying process to protect the bank’s money and the buyer’s interests to ensure that they are making a sound investment.
7. Secure Your Mortgage
There is no ‘one size fits all’ when it comes to mortgages. That is why we work to customize the entire process depending on your needs, taking the time to understand your unique financial situation, goals, and preferences.
Some of the mortgage options we will discuss with you include:
- Fixed-Rate Mortgage (FRM): A mortgage with consistent interest rates and predictable monthly payment throughout the loan term.
- Adjustable-Rate Mortgage (ARM): A mortgage with an interest rate that changes periodically, which can result in fluctuating monthly payments after the initial loan terms.
- Government-Backed Loans: FHA, VA, and USDA loans are designed for specific borrowers, such as first-time homebuyers, veterans, or rural property purchasers. We can help you determine if you are eligible for these specific loan programs.
- Jumbo Loans: Mortgages that exceed the conforming loan limits established by the Federal Housing Finance Agency, often used for high-priced or luxury properties. If your home price is above $766,000, you will work to get a jumbo mortgage loan.
When our team of mortgage brokers sits down with you, we will help you weigh the pros and cons of each option, ensuring you get all your questions answered. Our ultimate goal is to help find the best mortgage rates you can qualify for, so you can save money on your home loan.
8. Final Walkthrough and Closing
Once we have found the perfect mortgage loan for you, we will go through the underwriting and application process. Once approved to close, you will do a final walkthrough to confirm the home’s condition has not changed. At the closing, you will sign the closing paperwork, pay the closing costs and down payment, and receive the keys to your new home!
Brandywine Valley Mortgage | The West Chester Mortgage Brokers of Choice
Navigating the home buying process as a first time buyer is a big and sometimes complicated process. Our hope is that this checklist gives you a starting point to start the home purchase process and make it a bit more manageable.
And remember, you are not in this alone! Our team at Brandywine Valley Mortgage is here to answer your questions, provide expert advice, and guide you every step of the way.
Contact us today to start the approval process and get your questions answered!