First Time Home Buyers

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Step 1: What's holding you back from buying?

There are many things that can hold potential buyers back from buying a home. Many young people today have expensive student loan payments or damaged credit scores. Some don't have the money for a down payment and others are not ready to settle down in one place. No matter the obstacle you may face, we have some helpful tips and solutions to walk you through the process.

Learn more about what's holding you back.

Down Payment

I don't have money for a down payment. Many people today still think you need to save 20% of the home's value for the down payment, but that is just not the case. With an FHA loan backed by the Federal Housing Authority, you only need 3% of the home's value for the down payment, and you don't need any "reserves*." An FHA loan may also be a good option for you if you have dings on your credit score since they are a little more lenient. With a 5% down conventional loan, you may need a slightly higher credit score, but will also most likely get a lower interest rate.

*A reserve is money left over after closing on the home.

Bad Credit/Too Much Debt

I don't have good credit or I have too much debt. As a general rule of thumb, you'll need a FICO score of about 650 to get a mortgage; and that's on the low end. Remember, the lower your credit score, the higher your mortgage's interest rate is likely to be which will greatly affect the total amount of money you pay for your home in the end. If you have lower than a 650 credit score, or want to raise your current score, we have some tips for you. It will take time, patience and determination, but we promise the enjoyment of home ownership one day will make all your efforts well worth it. A score of 700 or higher will put you in a much better position for scoring a low interest rate.

Not Ready To Settle Down

I'm not ready to settle down in one place. This is a popular trait among millennials who make up the majority of first time home buyers these days. And we can't really blame you. Buying a home is a big decision, and for most, it seems like a very permanent decision. But it doesn't have to be.

Rent Vs. Buy

I think renting may be cheaper than buying. Did you know that in Richmond it is 42% cheaper to buy than to rent?

Save For Nicer Home

I want to save more money for a nicer home. Did you know that a 1% increase in interest rates can drastically change your payment amount? That means you will pay more for the same house, or it could even mean you will get pre-approved for a lesser amount which equates to less house.

Step 2: Why is getting pre-approved so important?

Getting pre-approved is one of the most important steps in buying a home for a variety of reasons. By going through the mortgage process up-front, you will know exactly how much house you can afford. Getting pre-approved makes you "ready to buy" and will allow you to write a confident offer on a listing when you find one you want to purchase. It also prevents you from falling in love with a home you can't afford and can even give you leverage should you enter a multiple offer situation where you will compete with other buyers for the same home.

Step 3: Find a REALTOR®

It's important to find the right REALTOR® at the beginning of the process. After all, you wouldn't go to court without a lawyer! Your REALTOR® will be there to walk you through every step of the way. They will work to find the right home for YOU and will negotiate on your behalf. Oh, and did we mention the paperwork? You will find that buying a home comes with loads of it and your REALTOR® will help you fill it out correctly. The best part is, as a buyer, it doesn't cost you anything. REALTORS® work on commission and will get paid out of the fees the seller pays to sell their home.

Find a REALTOR® right here.

Step 4: Begin Your Home Search

This is undoubtedly the most fun part of the process, but at times it can be a little overwhelming and even a bit frustrating. Writing down a list of priorities in a home before you start looking can keep you focused during the search.

Find ideal first homes right here.

Step 5: Offers and Negotiations

Once you have found "the house," you will want to write an offer quickly (this is another reason why it's important to be pre-approved!) Your REALTOR® will help you with all the details.

Step 6: Inspections

It is recommend you hire an inspector to point out any current (or future!) problems with the home. This can save you a lot of money and headaches later on. Certain loans may even require you to get an inspection.

Step 7: Closing

Once the closing is finalized, you will officially be a home-owner.

Still Have Questions?