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First Time Home Buying 101.

February 13, 2024

Purchasing a home is the American Dream. It can be exhilarating, and it can be scary — especially if it’s your first time. The process may seem overwhelming at first, but with careful planning and guidance, you can navigate it successfully. Here’s a step-by-step guide on how to become a homeowner:

Prepare Before You Look

Purchasing your first home doesn’t start with hiring a Realtor or looking at community websites. It starts with understanding your finances. If you have debts, pay them off. The fewer debts you have, the better you will typically look to lenders.

Determine What You Can Afford

Once you understand your finances you can determine how much home you can afford. This translates to how much your monthly mortgage will be. Use this home affordability calculator to estimate how much you can safely afford to spend which is another tip on how to become a homeowner.

Save for the Down Payment

While it is common for homebuyers to put 20 percent down, not all loans require it. There are loans available to first-time buyers with good credit that require as little as 3 percent down which is another homebuyer 101 tip.

Save for Closing Costs

Closing costs are processing fees you pay to your lender when you close on your loan. In Texas, they range from 3 to 6 percent. That said, for a $300,000 home, closing costs can run from $9,000 to $18,000.

Do Some Paperwork

Before you talk to a mortgage lender, prepare your paperwork which is definitely on how to become a homeowner. You will need proof of income and employment such as tax returns, W-2s and 1099s, records or debt payments, and statements from your bank accounts. If you have other sources of income, be sure to bring those records, as well. Be upfront about anything that might impact your qualifications such as bankruptcy or foreclosures.

Seek Pre-approval

Before you go searching for the perfect home, talk with a lender and get pre-approved for a loan. This helps you in two ways — you will know how much you can borrow and get an idea of what your interest rate might be. It will also show sellers that you are serious about purchasing a home.

Explore Mortgage Options

There are many options available when it comes to mortgages. A reputable lender can help you explore them. The main categories for mortgages include conventional loans, FHA loans and VA loans. You can choose to have a fixed-rate mortgage, which has an interest rate that stays the same or an adjustable-rate mortgage which is tied to market rates.

Talk to Multiple Lenders

It’s good to shop around. The Consumer Financial Protection Bureau recommends comparing three to five different quotes to help you get the best mortgage for you.

Hire a Realtor® or a Licensed Real Estate Agent

Even if you are looking for a new-build home, it’s a good idea to have a licensed real estate agent or a Realtor® with you. They can guide you through the process, negotiate on your behalf and provide valuable insights. Realtors also can point you in the direction of communities that fit your family’s needs.

Research Homes

Make a list of priorities. Know what you need and want in a home. That way you won’t waste your time on homes that don’t meet your specifications — we recommend creating a must-have and a nice-to-have list. At The Grand Prairie, you have a choice of builders and floorplans, making it easier to find a home design that best meets your needs. Builders also offer various options and upgrades to further personalize your home.

Research Neighborhoods

The perfect home isn’t perfect unless it’s in a perfect neighborhood. Think about commute times, schools and amenities. Your Realtor® can help you narrow down communities. Visit websites. Tour your preferred communities at different times during the day to check out traffic, noise and activity levels.

Purchase Your Home

Once you find a home you love, it’s time to buy. If you are purchasing in The Grand Prairie, your Realtor® and builder representative can walk you through the final steps. After you sign the closing paperwork, you will receive your keys and become a happy homeowner.

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