Purchasing your first home is no small feat - the unfamiliar jargon, competitive markets, and range of financing options can easily make the process feel overwhelming. To help, we've created this first time home buyer guide to help you progress through the process with clarity and confidence.
As a credit union dedicated to supporting New Jersey's healthcare workers, HEFCU offers affordable first time homebuyer loan options, as well as personal guidance and the tools you need to succeed at each step along the way.
Keep reading to get started.
Steps to Buying a Home for the First Time
Every first time home buying process looks different, as it depends on your specific finances. That said, here's a general overview of the steps to buying a home:
Step 1: Assess Your Financial Health
Before you start looking at any properties, you'll want to have a crystal-clear understanding of your financial situation - the good, the bad, and the ugly. Take a look at your credit score, your debt-to-income ratio, and your overall budget to help get an idea of what you can realistically afford.
Step 2: Set Your Homebuying Budget
As homes are such large investments, most people pay them for decades after the initial purchase. You'll, therefore, want to set a realistic budget for what you can afford. As a general rule of thumb, most experts recommend spending no more than 30% of your monthly income towards housing. That's not always possible, but it's a good goal to aim for.
Besides the monthly mortgage, make sure to take into account other costs you know you'll need to pay. For many homebuyers, that includes:
- Closing costs (typically 2-5% for buyers)
- Taxes
- Homeowner's insurance
- Utilities (water, gas, electric, internet)
- Home maintenance
Step 3: Get Preapproved for a Mortgage
Before you start actively shopping for properties, it's a good idea to get preapproved for a mortgage. Doing so allows you to solidify your budget and shows sellers that you're serious. In areas of high housing demand, it also allows you to move as quickly as possible through the closing process.
HEFCU's loan department can walk you through prequalification, helping you secure the best possible rate and ensure you're ready for the closing process.
Step 4: Find the Right Home
Equal parts fun and stressful, shopping for the right home requires a balance of tenacity, deliberation, and assertiveness. You want to make sure that you're purchasing the right property, but oftentimes, competition will force you to make a decision sooner than you may like.
Generally speaking, working with a licensed realtor is a worthwhile investment, as they can guide you through the process and show you listings you otherwise might not see.
Step 5: Make an Offer and Close the Deal
Once you find your dream home, you'll begin the closing process by making an offer and hopefully having it accepted. Your agent will help you through this and should also walk you through the home inspection process.
After the seller accepts the offer, you'll finalize the loan and conclude the process of buying first house.
First Time Home Buyer Loan Option at HEFCU
Once you understand the steps to buying a home, it's time to explore the financing options available to you. HEFCU offers competitive first time homebuyer loans designed with healthcare workers and their families in mind. Whether you're buying a small starter home or the home of your dreams, our lending options offer affordability and flexibility.
Popular loan types include:
- Conventional Mortgages: Fixed-rate loans with predictable monthly payments
- FHA Loans: Ideal for first-time buyers with limited savings or those with less-than-perfect credit scores
- VA Loans: For eligible veterans and military service members
- HEFCU Home Equity Loans and HELOCS: Ideal for renovations or large purchases after you've built up equity in your home
If you're not sure where to start, that's where we come in. Our mortgage specialists can offer guidance and help you identify the best path forward.
Tips for a Smooth Homebuying Experience
For many, buying a first home is exciting, but it can also be draining. Here are a few tips to keep the stress to a minimum and ensure you end up with a home that's perfect for you:
- Stay organized: Keep all of your financial documents, such as pay stubs, tax returns, and bank statements, in one place. Lenders often ask for them multiple times.
- Avoid big financial moves: Thinking of switching jobs or opening a new line of credit? It's usually a good idea to wait until after you close, as doing so during the homebuying process can impact mortgage approval.
- Ask questions: There's no such thing as a silly question when buying a home. Your realtor and mortgage specialist are there to help.
- Get a home inspection: Even if it's not required, a home inspection lets you have peace of mind and fully understand the property you're purchasing.
- Know your deal-breakers: Try to separate your wants from your needs before you begin house-hunting. It'll help you move quickly when you find the right home.
And one final tip? Trust your gut. The homebuying process is complex, but leaning on your personal and financial support system will help you see it through to fruition.
Ready to Buy Your First Home?
Purchasing a home will likely be one of the largest financial moves you'll ever make, and HEFCU is here to support you during the homebuying process. Whether you're just looking at options or are ready to apply for a first time homebuyer loan, we can help you at each step along the way.
Reach out to us today or continue exploring our online mortgage resources to get started!
