Buying a home for the first time is a daunting task. The best thing you can do is to be as informed as possible. I hope that this guide will give you some peace of mind as you move forward.
Is the time right for you?
As the old saying goes, there is never a perfect time. What you should consider is whether your circumstances will allow you to purchase a home. Think about how some of the questions and answers below can help determine if the time is right.
Do you have the needed money saved up to purchase?
There is an old adage that you must have 20% saved up to buy a home. That may have been true many moons ago, but it isn't so now. Most first time home buyers put down an average of 3 to 5 % of the purchase price as a down payment. Couple that with the average closing costs (in Memphis in 2021) running from $8,000 to $12,000 (more on this later) and this should give you a good idea of how much you would need to have saved to purchase your home.
Can you afford the monthly payments?
The mortgage payments will also include paying into an escrow account for taxes and home owners insurance, but there will be other expenditures aside from what you pay to the mortgage company such as utilities, minor repairs, and maybe even Home Owners Association Dues?
Your Home Buying Team!
There are three parties who play important roles in your Home Buying experience. The Realtor, the Mortgage Broker, and the Closing Attorney. Each of these three persons has a part to play and is vitally important for you.
The Mortgage Lender
Have you spoken with a mortgage lender?
They can help you to determine if your credit is sufficient to qualify for a home loan. They will also help you determine how much you can qualify for and help estimate your monthly payment. Call them! Their entire job it to help qualified people to obtain home loans. They want you to reach out.
Here is the way to start the conversation with every lender you speak with: I am looking to purchase my first home. I think my credit is sufficient to allow me to obtain a mortgage, and I will have no problem with making the payments for the amount I will be borrowing. However, if I do not qualify, will you be willing to work with me to help me understand what I need to do to fix this?
The housing market is strong and that means that sellers will not wait around for you to prove to them that you can afford the house. Before you start shopping for your dream home contact your mortgage lender and get a pre-approval letter.
The Realtor
Not only is your Realtor is going to help you to find the home that you have been dreaming about, but they are going be your guiding light, your new BFF, and your shaman as to all things real estate. Your Realtor is going to be able to help you find the right home for you and your needs, but they also need you to come to the table with an idea of what you are looking for. If you have a specific area of town, a certain home style, you want to be near a certain school, these are all choices that only you can make, but will help your Realtor to know.
Choosing a Realtor is hard, there are so many qualified and caring Realtors to choose from, it is in your best interest to speak to a few and see who you click with and whom you feel like compliments your needs and home searching style.
The Closing Attorney
Most people have no idea why they need a Closing Attorney, they just know that they need one. The Closing Attorney serves many different functions throughout the stages of the contract and the closing. The Closing Attorney starts to work just as soon as the real estate contract is finalized. A title search is performed on all parties and the property. This will include looking at the history of the transactions involving the property as well as looking to see if the buyers and/or sellers have any outstanding judgments, liens, bankruptcies or other things that would encumber the property and potentially affect the transfer of the property.
Once the Closing Attorney ensures that there are no issues with the title, they then start working with the Mortgage lender to finalize all of the loan and legal documents that you will sign at the closing.
Once closing day arrives, the Closing Attorney should walk you through all of the documents that you are signing to ensure that you understand what it is that you are agreeing to and signing.
In Conclusion
Whether you are just shopping around or are looking to get down to business and start buying your home, you should embrace any resource that can help you. This website closetrakagent.com is free and can help provide a detailed analysis of your closing costs, once you login, choose "Jeremiah McGuire."
If you feel that this information may help you or a client, please reach out. It is my mission to help others.
Jeremiah L. McGuire
Attorney
Memphis, TN
901-494-1622
jeremiah@harkavyshainberg.com
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