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  • Phil Wells

Initial Steps For Buyers

If you're a first time home buyer or you just haven't bought a home for a few years then this video is for you.



1) Save for a down payment


Saving for a downpayment may take a while. It might be a little frustrating to continue renting or continue living with family while you put together a downpayment but for most buyers this is an essential stage in the process.


For a conventional loan a down payment is typically around 20% of the purchase price although some lenders may allow less of a down payment and some may even require more.


There are also different types of loans out there such as a VA loan or an FHA loan that require a 0% to 3.5% down payment. It’s well worth figuring out if you qualify for one of these loan types at the outset because if you do you could save yourself a lot of time.



2) Check your credit score


It’s no secret that a good credit score is essential to buying a home. If you want to qualify for a mortgage and you want a good rate on that mortgage you’ll need a solid credit score.


Take a look at your credit score as early as possible. There are a ton free resources for doing this such as one that I use, creditkarma.com.


If there are areas that you need to address you want to know about these as soon as possible. There’s no point spending 2 years saving for a downpayment only to discover that you should have opened a credit card 2 years ago to improve your credit score or should have focused on paying off debt instead.



3) Determine your budget


Knowing your budget early on is vital for several reasons. There are a free online calculators where you can input your income and monthly expenses to get a ballpark figure of what you can afford. This is a great way to figure out roughly how much of a downpayment you should be saving for.


The best way to figure out your true budget though is to talk to a lender. A lender doesn’t just run your credit score and process a loan. A lender is a financial expert who can offer advice on how to improve you credit score, the amount of downpayment you’ll need and what a realistic budget looks like for you.



4) Shop for a lender


Not all lenders are created equal. Like a car loan different lenders will offer different rates and different incentives. For example, if you’re a first time home buyer, a veteran or front line worker you may find a lender that offers money towards your closing costs.


The bank you have a checking account with or a credit card with may offer you a better rate for sticking with them.


Compare at least a couple lenders and above all find someone that you’ll enjoy working with and who answers all your questions.


Don’t just think about the big institutions either, some of the best lenders I recommend to my clients work for local or regional companies you’ll probably never have heard of before.



5) Find a great agent


You want to find a real estate agent to represent you and your best interests in the home buying process.


Contacting a real estate agent early on will help you understand the process and get you to where you need to be faster.


You’re agent will be the person you deal with the most during the buying process so it’s important to find someone you get along well with and can be there for you when you need them.


A buyers agent is paid at closing by the seller so it costs you nothing to be represented during the process of buying your home. So please do not make the mistake of calling the agent who is selling a house to arrange a showing - remember this agent is already representing the sellers best interests.



Final thoughts


There you have it, a simple list of 5 things to get you started with the home buying process.


Taking the time now to get all your ducks in a row will help you begin house hunting with confidence knowing that you have your finances in order and have a great agent representing your best interests.


If you’re looking at buying in Spokane I would be honored to represent you so please reach out to me today to get the ball rolling and thanks for watching.

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