First-time home buyers want to know what they should be doing to successfully secure a property.  Whether you’re buying alone or with somebody else, in the city or in the country, for yourself or as an investment, it helps to know what steps to take and when.

We have put together a rough timeline for first home buyers looking to enter the market.

12 months or more from purchasing a home

You can never start too early when you decide that you want to purchase a home.  Understanding the home buying and mortgage process will prepare you for what is ahead and takes the fear out of the path to homeownership.  Why would you purchase a home (six figures) without the proper education?  A great way to do that is to attend a free home buyer education class.    Click here to schedule a class that fits your schedule!

Below are a few of the topics that you should start to tackle early in the decision to buy a home:

·         Decide what type of property you might buy

·         Where do you want to live

·         Learning who are the players in the home buying process.

·         Understanding credit requirements and lending program options

·         Knowing how much money you will need

·         How to make an offer

·         How to show for a home

·         The mortgage process

·         How much can you afford

Next, set a savings goal

The earlier you can start saving the better. Not only does it give you more time to reach your goal, it shows real estate agents, sellers and lenders you’re a good candidate too.

Curt Tiedeman, a mortgage consultant for Caliber Home Loans in Washingto State, says that the home buyer education classes that are provided for free like www.EducateHomeBuyers.org or WSHFC.org will give you a detailed idea of what costs are ahead.

Find out your credit score

Good credit scores show lenders your capacity to repay a mortgage loan.  You credit score can impact your ability to borrow money, so you want to know where you are at.

6 months from purchasing a home

Watch your expenses

When you’re applying for a home loan, you have to show lenders you can both save and spend money responsibly.  Lenders will use a debt-to-income ratio of 45% of gross monthly income.  This will include your new house payment and all your monthly obligations that show up in your credit report.  Six months out is a good time to create a budget to make sure you are saving enough and cutting out unnecessary expenses.

Look more closely at properties

Start looking at properties online that can fit in your budget.  Learn the neighborhoods, schools, commute time, amenities, crime statistics and other items.

Do you have a Plan B?  You may want to live in a specific area but it may be beyond your budget.  Do you have a contingency plan?  Can you live with one less bedroom or bathroom?  Look for other areas that may be more affordable.  Your first home is rarely your forever home.

Consider seeking legal advice

If you’re buying a home with someone else, whether it’s a partner, family member or a friend, there are conversations you’ll want to have ahead of time.

Getting some advice from a financial planner and lawyer will also help you know what can go wrong, and how to protect yourself.

This can involve learning about binding financial agreements, and different ways of owning property, such as tenants in common.

When buying a property with other people, getting legal advice is crucial to determine the right ownership structure and protecting your investment into the home.

3 months from purchasing a home

Meet with a lender

There is not a reason to look at homes if you are not pre-approved for a mortgage loan.  You will not be able to gain access to homes without being pre-approved or put in a valid offer without the lender providing a letter.

This step gives you the budget parameters…..what is the max that you can purchase.

Get your paperwork in order

For pre-approval you’ll need to get financial documents organized.

If you’re organized, you could possibly tackle this in a weekend. But if you need to reach out to banks or employers for paperwork, for example, give yourself more time.

Showing paystubs, W-2’s, bank statements, and proof of identification are just some of the things you’ll need to obtain.  Your lender will provide the exact list of items that they will need.

Being as organized as possible will make that process easier.

Find a real estate agent

With an approval in-hand you are ready to find a real estate professional to represent you.  Always have your own agent and use just one.  It is important to find a good one.

Your agent will represent and negotiate on your behalf, so find a good one!  Your lender can recommend one if your need help.

Go see some homes

Contact your real estate agent and inspecting properties will help you get a clearer picture about what’s is on the market in your price range.

It’s also a reality check that can show you how different homes can look compared to their online listing, and get you thinking about important things people often miss, like traffic noise.

Attending “open house” events and touring properties with your agent allows you get a feel for what features you want and don’t want.

Just make sure you have the self-control to not make an offer before you’re financially ready.

Final note

Prior planning can make the process so much easier.  It puts you in control and helps you make smart decisions, so get started by signing up for a class!