Buy Your First Home in the Triangle Even If You Don't Know Where to Start
Thinking about buying your first home? It might seem like an intimidating process when you first get started, but if you work your way through step by step, it really doesn't have to be all that complicated. Knowing what to expect and spending a little time preparing can help you feel more organized, informed, and ready to make smart financial decisions.
If you're thinking about buying your first home in the Triangle area, we'd love to help! Please feel free to contact us at any time.
Understanding Your Mortgage
The first step to purchasing a home is getting a mortgage! And before you start calling lenders, it helps to know a little more about what you can expect... like what types of loans might be available to you.
Types of Mortgages
There are dozens of mortgages out there, but these are some of the most common ones we see here in the Triangle area.
The most common type of loan, this "standard" mortgage often requires a down payment of 10% – 20%, as well as excellent credit and steady income.
Targeted to moderate-income buyers or those with less-than-excellent credit, this loan offers lower qualification requirements and as little as a 3% down payment.
Available to most active and veteran military personnel, the VA loan offers lower qualification requirements and down payments as little as 0%.
This loan is targeted to moderate-income buyers searching specifically in more rural areas. Like the FHA loan, it offers lower income, credit, and down payment requirements.
What Do Mortgages Include?
Your monthly mortgage payment actually doesn't just include the repayment of your loan. A few things are bundled into that payment to simplify the payment process. Here's what's typically included.
This is the repayment of the initial amount you borrowed (typically the price of your home, less the down payment).
When you borrow money, your lender charges you interest. The interest is calculated out for the duration of the loan and divided into monthly payments.
Your annual property taxes are also typically bundled into your mortgage payment. Your lender will collect a payment monthly, then pay your bill annually.
Like property taxes, your homeowner's insurance is often collected from your lender monthly and paid to your insurance company annually or bi-annually.
Going Loan Shopping and Getting Prequalified
Well, now that you know a little more about mortgages, it's time to start talking to lenders!
Ask for referrals
One of the best things you can do when starting the loan process is to ask around for referrals. Working with a lender you trust is essential to feeling secure during the process.
Once you find a few lenders who look promising, pick up the phone or send some emails. You want to talk to a few lenders before committing to any one.
Lenders will likely be eager to talk to you about what they can offer. They'll set up a phone meeting to discuss loan options, as well as what you might expect to pay.
During your meetings, it's likely your lenders will ask if you want to get prequalified, and your answer should definitely be yes. Getting prequalified is an important first step to buying.
Finding a Real Estate Agent in the Triangle
One of the single most important things you can do for yourself as a new home buyer is to find a good real estate agent in your preferred location. You want to find an agent who knows the area, who knows the market, and who's experienced working with first-time buyers. The right agent will know the process inside and out so they can guide you through the more intricate details of the buying process, like negotiations, the inspection, and the appraisal. They will also know how to spot the homes that will work best for your needs, and can help you weigh the pros and cons of a particular home, neighborhood, or area. Plus, your agent is your advocate, which means they're always out to help you get the best deal possible and will always have your best interests in mind.
Looking for an experienced and knowledgeable agent in the Triangle area? Find out more about what our team has to offer.
Shopping Homes for Sale in the Triangle
Once you've got your agent and you're prequalified for a loan, it's time to start shopping! Here are a few things you might want to know before you start your search.
The Shopping Process
Make a list
Before you head out to explore, take some time to think about what's really important to you in a home. Once you get some ideas, decide which of those things you absolutely need versus things you want or would like to have.
Touring a lot of homes can quickly become tiring. That's where your wants and needs list comes in. Before you schedule any showings, make sure a home fits all your needs and at least a few of your wants. Don't waste your time on a home that doesn't fit your needs!
Before you find the perfect home, you'll probably take a look at quite a few homes. After a while, they can start to run together. It helps to take notes, or photos, of each house to remind you of the things you liked, or didn't like, about each one.
Making an Offer
Once you find a home you love, you and your agent will sit down to formulate an offer. This contains quite a bit of information—like the purchase price of the home, as well as your closing date and any contingencies you request. Commonly, buyers request an inspection, appraisal, and mortgage contingency. Your offer is actually an official document called the Purchase & Sale Agreement. Here's what happens after you submit your offer.
What Happens Next?
Once you submit the offer, the seller has three options. They can accept the offer as-is. They can decline the offer. Or they can submit a counter offer with modified terms. Once the ball's back in your court, you have the same options. This back-and-forth is called negotiating.
Once you and the seller reach terms, you will both sign the modified and updated Purchase and Sale Agreement. Once you've both signed, the home is officially under contract and the next phase begins.
Now you have some time to do a little research. During this time, you'll have a home inspection to root out any potential issues and an appraisal to ensure the home is worth the value of the loan. Should any problems arise, you likely have the ability to walk away from the sale (depending on the contingencies outlined in your contract).
Once the due diligence period has ended and you and the seller have worked out any potential issues or price adjustments, it's time to close! During the last few weeks, you'll work with your lender to finalize your loan, determine your closing costs, and finally, arrive at the closing table.
Finalize your loan
Be prepared to submit lots of financial and personal paperwork. This part of the process can be a little tedious, but it's fairly short-lived and ensures your lender is able to do a full background check.
Sign & pay
Your lender will let you know ahead of time what your closing costs will include and what the total will be. Before you reach the closing table, you'll have to obtain a cashier's check or wire your closing costs.
Get your keys!
At last! You've signed all the paperwork, paid your closing costs, and now the keys to your very first home are in your hands! Congratulations!
Still Have Questions About Buying Your First Home in the Triangle?
Are you dreaming about your first home purchase here in the Triangle? We'd love to help! Contact Reeves Realty today to learn more about how we can help make your home-buying dreams a reality.