My husband and I at very young ages, decided we wanted to become first-time home buyers. Instead of buying though we wanted to build. The housing market in Florida at the time was thriving, so we thought it would be the ideal time for us to look into building our starter home to have an investment. We had finances set aside for any out-of-pocket expenses that may arise such as down payments and closing costs, checked out first-time home buyer construction loans and researched many banks to find the best rates.
Once we were ready, we had to get pre-qualified for our loan before we could find the land we wanted to build on. While all this caused many frustrations, my husband and I were ecstatic to see how well we had built our credit in 4 short years. We had good jobs with 401K plans to help prepare for retirement, paid bills on time, made sure our credit card balances were low and only used them for groceries, paying off immediately. We qualified for our construction loan and began searching for the appropriate area to build our home.
Once we found our land, the mortgage process began with us gathering documentation, getting our rate locked and everything else involved such as acquiring construction insurance and mortgage insurance, a policy protecting lenders to help reduce or eliminate a loss in the case of a default by the borrower. I believe this was required for our loan as we were first-time home buyers with little out-of-pocket expenses.
Places such as Genworth offer affordable Mortgage Insurance, giving home buyers peace of mind, payments that never increase and easier closing paperwork than traditional FHA loans. Make sure you ask your lender if mortgage insurance is required.
Watching our home be built was a satisfying experience. We watched it be built from top to bottom, and chose everything. Though, it was our first home, it was OUR home. We went through all the stresses with many obstacles along the way of the building process, but we were very proud of our small starter home.
Would we ever build a new home again? Absolutely. Actually, we are in the process of discussing this now, to build in the country. We enjoyed choosing everything for our home, from the colors, flooring, cabinets to windows. And the low-maintenance was a huge advantage, knowing everything was brand new in our home, meaning fewer repairs at least for a while.
Tips for First-Time Home Buyers
Shop Around-Shopping around for the best rates will make a difference in the long run. Make sure you only talk to reputable agents and banks.
Know What You Can Afford-Figure your finances, debt and how much you have for a down payment. I recommend using a mortgage calculator for an estimate of what you can afford for a home.
Get a copy of Your Credit Report-Knowing what may be hurting you is best before trying to apply for a loan. Once you get your copy, carefully go through everything. If you have issues, get them fixed first.
Start Saving Now-Many first-time home buying programs offer little to no money down. That doesn’t mean you won’t have to pay anything out of pocket. Saving now for closing costs, appraisal fees, attorneys, mortgage insurance and other hidden fees will help when you’re ready to apply for that loan.
Get Paperwork Together Now-Your life is needed here. You’ll be asked for tax documents, bank statements, proof of income, divorce decrees if necessary and much more.
Stay Calm- I know easier said than done. Buying a home is a long stressful process. I learned the hard way as I was always stressed through our home being built. Planning ahead for your home buying experience will make it much more enjoyable. Finding a trusting agent who returns your calls, answers your questions and cares about your worries, will also give you a better experience. Make the home buying process enjoyable as it will be worth it in the end.