Is your client a first time homebuyer? Buying a home for the first time is exciting but it can be daunting. Check out these 10 helpful tips that will make the first time home buying process easier for both you and your client.
1. Don’t overspend!: When your client makes that crucial decision to buy a home, you’ll want to advise them to consider how much they can afford on a new home. Looking at their budget to understand how a mortgage will fit in will greatly help.
2. Create a wish list: By creating a wish list, your client will be able to prioritize what they need and value in a home.
3. Identify the impending down payment: 20% of the target purchase is the industry norm, but there are other options if they don’t have the funds for a significant down payment. There are a variety of loan programs offered at various credit levels.
4. Decide on a suitable neighborhood: A neighborhood might meet all qualifying standards, but it might be helpful if they visit the area at different times, including during heavy commute times, weekends and later in the evening.
5. Check credit scores: Before your client talks to a lender, you’ll want to advise them to identify any discrepancies and get them fixed as soon as possible.
6. Put the large credit purchases on hold: Large purchases may impact your clients’ debt-to-income ratio and may affect their ability to qualify for a loan.
7. Season down payment funds: Your client will want to make sure that their down payment and closing cost funds are in their account 60 to 90 days prior to closing; some loans may require that the funds have been in the account for a certain amount of time.
8. Help them understand rate vs. points: With the stress of buying a new home, your client may not carefully consider points vs. rates. Help them understand the difference and the cost implications of both.
9. The standings with lenders: Borrowers with higher credit scores can shop around for the lowest available interest and get a conventional loan. Borrowers with lower credit scores may experience higher rates. Reassure them that there are many promising loan options available, and the difference in payment due to the higher rate may be less than you think.
10. Make the choice: Encourage your client not to miss out on the home of their dreams and make an offer.
As your clients’ PA realtor, you can help relieve some of that unwanted stress by sharing these useful tips with your client. Visit www.keystonecustomhome.com for more information on our First Time Homebuyer seminars.