BY MARISSA RIGALI, Guest Columnist
Buying your first home is an exciting time, but it’s also a very big responsibility. As a mortgage specialist working strictly with first-time homebuyers, I’ve seen firsthand how easy it is for homebuyers to get swept up by the excitement and forget they are making a substantial financial commitment.
I have found that most first-time homebuyers aren’t prepared for the home-buying process. That is why it is important to talk to a lender early in the process who can tell you what you need to know and help walk you through the steps before you buy.
Here are some things to think about if you’re a first-time homebuyer:
Evaluate your credit history and score. A lot of the challenges I come across with first-time homebuyers are credit issues, mostly defaults on utility collections or failure to pay credit cards on time. So the first thing to do is sit down and run a credit check to see if any issues come up. You can pull your credit report for free once a year at annualfreecreditreport.com.
If anything derogatory does show up, the second thing you’ll have to do is make a commitment to fix it. It usually takes time, but start by paying back small debts first and then move on to bigger ones. And if you have no credit history, there are ways to build credit in a responsible way.
Determine your all-inclusive monthly payment. A big mistake people make is looking for homes before they’ve figured out what they can afford. Don’t focus only on the listing price, but also take into account the mortgage payment, mortgage insurance, homeowners insurance, utilities, HOA fees, and your other debt. You have to go into this buying decision knowing what you can afford each month, when all is said and done.
Look into down payment assistance programs. Some cities and municipalities offer down payment assistance programs based on income qualifications. These programs are very helpful, but may come with stipulations regarding home price and location, so make sure you read the fine print before starting your home search.
It’s always a good idea to have a little money saved up. Even if you’re getting down payment assistance, buying a home comes with expenses you might not immediately consider. Having some money saved will help cover the costs for expenses like a home appraisal or security deposits on utilities. And let’s not forget that once you’re a homeowner there is no maintenance person to call if an appliance breaks down or your roof starts to leak. These repairs are now your responsibility.
Find a realtor that is on your side. A good realtor will respect your all-inclusive monthly payment and find homes to show you that keep you within this amount. The realtor will also help guide you through the home-buying process and advise on key steps to take before making an offer or closing on your home, such as getting a home inspection.
Speaking of a home inspection – always get one and pay attention to what it tells you. Oftentimes, homebuyers skip this step because they don’t want to pay for it, but it can be very revealing. An issue with the air conditioning or roof can carry big costs if something goes wrong. It’s better to know about any potential issues up front so you can make an informed decision about how to move forward.
If it’s determined that you’re not quite ready to buy your first home, there are steps you can take to get ready, so work with your lender to determine what needs to be done. I also recommend going through the HUD certification course. It provides a lot of great information and many assistance programs require it anyway.
Marissa Rigali (NMLD ID 364663) is a CRA Mortgage Loan Originator, specializing in helping first-time homebuyers throughout the Tampa Bay area. For more information on qualifying as a first-time homebuyer, call 727-288-6100. USAmeriBank (NMLS ID 456668).