How Do I Start the HomeBuying Process?

We talk so many first time home buyers every week, and often times the conversation starts with, How do I start the HomeBuying Process –  They’ve looked online, they’ve talked to friends… and they’ve gotten the notice from their landlord that their Rent is going up.

It’s pretty easy to calculate what the principal and interest will be on a mortgage, there are a million and one calculators out there.

With mortgage rates this summer still in the 4% APR range (or lower, depending on when you talk with us), a house payment really can be cheaper on a monthly basis than renting.

In general, one recent study, that looked at American Millennials found that  most of these  adults don’t budget, or keep a close track of their spending.  Like youth of other generations, many of the  young adults in the study, ages 18 to 21, fail to pay their bills on time every month.

But the SHOCKER for us was a statement in the study that:

Parents (of kids in this age group) admitted to feeling less prepared to give their young adults guidance on investing than they do about sex!  It’s no wonder we have people calling to find out : How do I start the HomeBuying Process

Tells me why you might be looking for advice on buying your first home on the Internet!  As Mortgage Lenders, we’re not surprised by the findings.  So, we figured it might be a good idea to give you a short list of what to do, and what NOT to do when you are starting the home buying process.

First remember our Moto – “FIRST THE LOAN – THEN THE HOME.”  Many of the folks we talk to have already started looking for a house.  They talked to an eager agent, and that person put them in a car, and started showing them houses….

Many of those first time home buyers know nothing about the First Time Home Buyer grants available from the State of NC – or the Mortgage Tax Credits we can offer through NCHFA!

Often times, when we talk to these folks, they’ve already fallen in love with a house.  And it if they haven’t gotten in a car with an Agent, they’ve been online looking at homes, have attended Open Houses, or even started working with an agent.

Sooooo – the FIRST thing to do, if you are tired of paying higher and higher rents, and going to the basement to wash your clothes – is talk to us FIRST.  Let us figure out what your payments are going to be.  Let us figure out what your credit looks like… then follow these basic rules.  Again, when you are looking at:  How do I start the Homebuying Process – the first step is TALK TO THE LENDER.

Things to DO before you buy a house

• Continue working at your current job – if you are due for a raise, or get a call from a head hunter… PLEASE talk to us before changing jobs!
• Stay current on all your accounts, do NOT allow anyone to place a collection on your account.  If you get a letter, then make a small payment, even if you don’t feel you owe the money.
• Keep making your rent payments on time, and remember that we will be pulling another credit report 2 or 3 days prior to CLOSING.
• Send us an updated copy of the Contract if anything changes
• Call us if there are any Seller Repair issues

Things you DON’T want to do before you buy a house:

• Do NOT apply for a new credit card to pay for your new refrigerator  or sofa, or whatever.  TALK to us before making any purchase over $500 between the time of loan application and closing.
• Make any major purchases (Car, Boat, etc.)
• This means that you should NOT apply for new credit or open new credit cards, remember that we will be pulling another credit report 2 or 3 days prior to CLOSING
• Transfer any balances from one credit or bank account to another – we know that especially around holidays banks start offering to transfer your credit card balance for a lower rate… please, please wait until after closing to do this.
• Don’t wait until closing to pay for a Home Inspection if you are getting a USDA Home Loan
• Make large deposits ($200 or more)  that can not be sourced.  We MUST document ALL of the money going in and out of your account
• Pay off any charge-off accounts or collections
• Take out furniture loans
• Close any credit cards or Consolidate credit debt
• Max out your credit cards, remember that we will be pulling another credit report 2 or 3 days prior to CLOSING

Basically, while you are in the process of getting a new mortgage, keep your financial status as stable as possible until the loan is funded and recorded.

Any number of minor changes could easily raise a red flag or cause a negative impact on a credit score that may result in a denied loan. So, while not trying to intimidate a First Time Home Buyer, there are some things to watch out for!  Contact us with any questions you might have throughout the process so that you don’t do anything that may cause you to be denied.

Call Steve and Eleanor Thorne 919 649 5058 if you have any questions about / How do I start the HomeBuying Process /  Connect with us on Facebook!  We love to work with First Time Home Buyers in NC