First-Time Home Buyer Fears — And How to Overcome Them

October 31, 2019
Posted in Programs
October 31, 2019 derekevansteam

Here are the common first time home buyer fears, and how you can overcome them!

  1. “I am afraid I don’t know how to find the right realtor”

Finding the right real estate agent is no different than hiring any other professional. You’re looking for someone with experience, a good working knowledge of the market where you’re looking to buy, and someone you’ll be comfortable working alongside. Interview at least three candidates, ask for referrals, and follow up on them. Be sure the agent is licensed and don’t be afraid to ask about their commission. If you don’t have a realtor in mind, your lender will be able to provide you with a referral.

  1. “I don’t know where to start looking for a mortgage lender”

The relationship between real estate agent and lender is an important one. Most agents have a preferred lender, but that doesn’t mean you have to work with them. Choose a dedicated loan officer that will walk you through the available loan programs and approval process. You want a loan officer that will keep you up-to-date on the progress of your loan and be available to answer any questions. Read reviews online and ask for referrals. Your mortgage lender is a huge part of the home buying process.

  1. “I am afraid to start looking for a home when I don’t know what I can afford”

Ask your lender for a pre-approval. A pre-approval will give you an affordable price range so you can begin your house hunting with confidence. With a pre-approval in hand, the seller is more likely to accept your offer than one from a potential buyer who has not been pre-approved. The seller will also appreciate the fact that you’ll be able to close more quickly.

  1. “I’m afraid I don’t have the credit score required to get a loan”

Good credit is critical to getting a great interest rate on your loan. The higher your score, the better rates and terms you’ll get. The less risk to your lender, the better your chances of loan approval. Your credit score is a reflection of your ability to pay.

With your permission, your lender will access your credit score and explain it in more detail. If your credit is not where it should be, your lender can provide you with tips to improve it. Don’t be so quick to assume you can’t get approved, loan products allow for credit scores as low as 580.

  1. “I’m afraid I don’t have enough money for a down payment”

The good news for first-time homebuyers is that there are loan programs available from the Federal Housing Administration (FHA) with down payments as low as 3% of the total cost of the home. Some FHA loans also accept gifted down payments. If you’re a veteran, surviving spouse, or active service member, there are some VA loans that require no down payment. If you’re planning to buy in a rural area, ask your lender if you might be eligible for a USDA loan — they do not require a down payment either. Be sure to ask your lender about the availability of grants or other down payment assistance programs available specifically for first-time homebuyers. And don’t underestimate the power of seller concessions.

It’s not so scary

Working with a knowledgeable real estate agent and lender can make all the difference in your home buying experience. If you’re ready to take the next step and become pre approved, fill out the form below: