As a first-time home buyer, the most important thing to bear in mind is whether you can really afford to take this step. It’s wise to put together a budget before you start looking for a property.

Don’t stretch yourself if you think you’ll struggle to keep up repayments. Also, think about the running costs of owning a home such as household bills, property tax, and home insurance. Lenders will want to see proof of your employment, income and certain expenditure, and if you have any debts.

As part of the mortgage application process you will need to show the lender evidence of any outgoings, and prove your income. Use our Mortgage Calculator to work out what mortgage you can afford.

Buying a home is a huge financial commitment. There’s plenty to think about so it can be difficult to know where to start. Use our timeline to find out more about the process, key stages and what fees to expect.

Not sure how to choose a home

The first step is: To think about your wish list of what you’d like to have in your dream home. You’ll need to decide a price range, type of home (e.g. single family home or condo), number of bedrooms, bathrooms, etc.

A local licensed agent: Real estate agent can be helpful because buying a home requires understanding the many rules and requirements that have to be met locally by a buyer and seller. An agent can help you.

Ask plenty of questions: As you do so, you’ll learn which type of home, neighborhood and mortgage are right for you and better understand the exciting choices you’ll make — including which new home community, builder, and lot is right for you — and choices you’ll make to personalize your home. Takes as much time as you need to find the perfect home. Then work with your real estate agent to negotiate a fair offer based on the value of comparable homes in the same neighborhood.

Make an offer: When you buy a house, you will make a “purchase offer” to buy a house. The seller may accept your offer or reply with a counter offer.

A home inspection: Generally, a buyer hire a professional inspector to check for signs of structural damage or things that may need repairs.

A home mortgage: A mortgage is a loan taken out to buy property. Most run for 10 years, 15 years, 20 years and 30 years. The loan is ‘secured’ against the value of your home until it’s paid off.

Our Professional Mortgage Consultant will help you throughout the loan process. During the loan process, we can help you figure out how much you can borrow, what type of mortgage is best suited for your needs, and for how long.

Basics of Mortgages:

Pre-qualify a mortgage. Our professional Mortgage Consultant will consider your income to determine the amount of loan and look at your debt to income ratio to determine the amount of loan you will qualify for. In other words, the balances on your credit and other loans will reduce the amount of the mortgage loan you will qualify for. Your credit score determines the amount of interest and type of loan you can qualify for.

Pre-approval letters. This letter tells the seller and their agent how much of a loan you qualify for. Most realtors like to see a pre-approval letter before they will agree to represent a buyer and begin showing them homes. Based on your income, expenses, and credit, a lender will provide you with pre-approval letter for the loan amount and type of loan that they are willing to lend to you based on these factors.

Type of mortgage: The type of loan you qualify for will determine your monthly payment amounts, the length of the loan and other terms of the mortgage. You don’t just pay attention on the interest rate and fees you will be charged, you also consider what type of mortgage you can quality for a loan. The basic type of mortgages into two main categories: those are fixed interest rates and an adjustable interest rates.

Interest on your loan: Fixed interest rate loans are mortgage with an interest rate that will not change over the life of the loan.

Click here to learn more about our “Fixed rate Mortgage”.

Adjustable rate mortgage (ARM) is a mortgage interest rate that is not fixed, but changes periodically based on a selected index that reflects changes in inflation and cost of credit.

The interest rate and your payments are adjusted up or down as there are changes in the index. Interest only loans are loans where the borrower pays only the interest on the principal balance, typically for a five, seven or ten year interest only period. After this time, the principal balance is amortized for the remainder of the term.

Click here to learn more about our “Adjustable rate Mortgage”.

The mortgage loan process may vary depending on the choices you make before the final closing. It is recommended that you obtain for a loan pre-approval to ensure you know the loan amount for which you are qualified before you begin touring potential homes.

During the pre-approval process, the majority of documents necessary to process and secure your mortgage will be gathered and reviewed.

Whichever mortgage you apply for, you will need to prove your income, and show the lender evidence of any outgoings, including debts. To prove your income, you may have to produce pay stubs, W-2s, tax returns and bank statements. If you are self-employed you could be asked for tax returns and business accounts prepared by an accountant.

Click here to learn more about our “Mortgage Loan Process”.

The Big Day! Closing is the final step in the loan process

As part of the sale, the buyer can negotiate with the seller to pay a portion of their closing costs up to a certain percentage depending on the law and type of mortgage involved.

Local practice establishes which side – seller or buyer – is responsible for some or all of the closing costs in a transaction. But generally, the buyer is required to pay those costs associated with its obligations in the transaction, such as:

During closing, the deed of title is delivered to the buyer, the title is transferred, financing documents and title insurance policies are exchanged, and the agreed-on costs are paid. Some of the final documents, including the deed and mortgage or deed of trust, are signed by the appropriate parties, and then delivered to the county recorder to be recorded.

At closing, you and the seller will sign the loan documents that required to complete the purchase.

You’ve got your mortgage, closed the deal and now it’s time to move in!