• Idaho First Time
    Home Buyer's Guide

Idaho First Time Home Buyers

A Guide for First-Time Home Buyers

Pursuing the American Dream of Home Ownership is a big deal and many consider is a step into adulthood. And now millennials are joining the party—the average first-time home buyer in the U.S. is 31 years old. But before you buy, here are some things to do.

1. Assess your need

You don’t want to be buying a home just because you turned 31 or because your friends have started doing it. Determine whether it’s better for you to buy or rent at this time in your life. Think about your family and whether you have plans to marry or have children in the near future. Factor in your job and if it’s stable, whether you plan to stay long term or if you are itching to try something new. Make sure you are buying a home because you want to and you are ready at this time.

2. It's a Math Question

Many people focus on the down payment when they think about buying a home. Yes, the down payment is usually a large chunk of money. But there are other upfront costs you need to think about—taxes, property insurance and closing costs for example. Insurance rates and property taxes will vary by state so you’ll want to check on what it would be. Closing costs encompass many fees including origination, underwriting, appraisal and title insurance. It can add up to a surprisingly large number so it’s good to know it ahead of time.

3. Start Preparing in Advance

You’ll want to have all your documents ready to make the process go smoothly. In most cases, you will need government issued ID, a credit report (you can get free copies every year), a verification form from your employer, W-2 forms, federal tax returns and bank and asset statements. Some of these documents would also have helped you to figure out how financially ready you are to buy a home. For example, you want to make sure your credit is in great shape before you try to get a mortgage and pulling your credit reports can help you see where you stand. You can also check your credit scores for free using the Credit Report Card, a free tool that gives you grades on the major credit scoring factors so you know where you can improve your scores.

4. Go Shopping

A house is likely the largest purchase you’ll ever make, so treat it like other large purchases. That means you want to shop around as you would for a car, TV or couch. It may be time consuming but it’s important to look at comparable homes in the area. You could work with a licensed real-estate agent or start your search online. You want to look at a variety of options to not only find the right one for you but to get a feel for the pricing in the area.

5. Step back and Be Prepared to Walk Away

If you aren't comfortable with the purchase, you may have to leave a near-perfect house for someone else to buy. Before you make this large of a purchase, you want to be sure you feel OK committing to a monthly mortgage payment.

 

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Top Reasons to Get Pre-Approved Before Looking at Houses

The one thing you should absolutely do before you look at housesis get pre-approved for a home loan. Shopping for a home without a pre-approval is like shopping at a high-end store without understanding what you can afford to pay. Keep reading to learn why you should get pre-approved first!

Sellers Want Buyers that are Pre-Approved

Nobody wants to waste time, including sellers.  They do not want to spend time with buyers who  have not made arrangements to be able to buy their home. They want to know that you are capable and have taken time to arrange financing to buy a home. Without a pre-approval in hand, they are taking your word for it. How do they know that you can afford the home? The pre-approval letter from your lender provides the proof that you can purchase the home.

You Can Stay Within Your Home Buying Budget

Why waste time shopping for a home you cannot afford? It is also much more enjoyable to know what your home purchasing parameters are. This will inevitably help prevent any type of letdown when you realize that you can’t afford the home you thought you fell in love with. Also, you’ll find a home faster by not looking at things you cannot purchase.

You’ll Know if You Have Any Barriers to Approval

You won’t know it until you apply if there are problems for you to solve prior to getting the loan closed. When the lender pulls your credit, they may notice sissues that will prevent you from securing an approval. You can use this time to find out what’s wrong with your credit and see what you need to do to fix it. Sometimes it’s not your credit, but othere things like your debt to income ratio, lack of assets, or inconsistent employment that prevents you from getting an approval. By getting pre-approved, you can work on fixing those issues immediately rather than when it is too late.

You May Win a Bidding War

In a seller’s market, you could wind up in a bidding war. When there’s high demand for a specific home, buyers may try to outbid one another. Having the pre-approval can:

  • Help you know your budget constraints when bidding on a home
  • Help the seller take your bid seriously

If you don’t have that pre-approval letter, you may find a seller that takes an offer lower than yours because that buyer has a pre-approval letter. It holds a lot of weight in the eyes of the agent whe present your offer to the seller.

Getting a pre-approval before you shop for a home is one of the best decisions you can make. Pre-Approvals also help you get your bearings – you’ll know what you can afford and what conditions you have to satisfy to get the home loan. Sellers will have more respect for your offer and you may stand a better chance of buying the home you really want!

Need a Home Loan?

Trusted Lender Partners    

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Piper Andrisek, Fairway Mortgage
Piper Andrisek
NMLS#1429063

Boise Idaho Home Loan Professional
NMLS #2289

208.870.6718

PiperA@FairwayMC.com

Website

Apply Online

Cory Powell, Fairway Mortgage
Cory Powell
NMLS#1458128

Boise Idaho Home Loan Professional
NMLS #2289

208.850.3363

Cory.Powell@FairwayMC.com

Website

Apply Online

Jill Cattano, PRMG Boise Idaho
Jill Cattano
NMLS#1609902

Boise Idaho Home Loan Professional
License ID MLO-21321

561.303.7751

JCattano@prmg.net

Website

Apply Online

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