Part 1 Buyer’s Guide: Preparing & Getting Qualified

This is Part 1 of the First Time Home Buyer’s Guide.  You can read the rest of the series here.

Buying a home for the first time can be overwhelming with all the tasks that need to be done from the beginning until the day you receive your keys. Hopefully, I will help make it easy for you by breaking it down in a series.

The first thing a buyer wants to do is to make sure they are qualified to purchase a home.  They want to explore all of their options on financing:  VA, FHA, Conventional, Cash or Alternative Financing (Private Money, Owner Will Carry).  The most popular option for first-time buyers is FHA financing.  The down payment is low (currently at 3.5%) and if they hire a savvy buyer’s agent that can get their closing costs paid, they are not really looking at coming up with a whole heck of a lot more out of pocket expenses with buying than renting a home.

There are also Down Payment Assistance (DPA) options available to the first time buyer to help cover for closing costs, down payment or both.  Of course, you do need to qualify for these options just like you need to qualify for a loan!

You also want to start saving up for your Earnest Money Deposit (EMD).  Your EMD shows that you have good faith to purchase the property and if you back out for reasons outside of your “contingencies“, the seller may not release your EMD back to you.  EMD is usually around 1% of the purchase price of the home.

Next:  Part 2:  Interviewing Agents

 

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Sharon Paxson is a full-time REALTOR® with Compass and has been specializing in residential real estate throughout the Newport Beach area since 2005 assisting Buyer’s, Seller’s, Landlords and Tenants with their real estate needs.

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