Modus Mortgage

First Time Home Buyer

Everything you need to know to make that big purchase easier

First Time Home Buyer

Everything you need to know to make that big purchase easier

Your Guide to Homeownership

When it comes to buying your first home, one thing is for sure: you’re going to have to make a lot of choices. Some of those are entirely up to you and your personal preferences: neighborhood, style, one-story vs two-story, or what color to paint the front door. On the other hand, though, there are going to be a lot of choices to make that might end up confusing or even overwhelming to a first-time buyer. Should you go with the predictability of a fixed-rate mortgage or the options of an adjustable-rate? Does an FHA loan make the most sense? What does the USDA have to do with mortgages?

Below are a few tips and guidelines to get you started. If you have more specific questions about mortgages or mortgage jargon we have more information available in our resources and learning center tabs.  When you’re ready to take the next step, we’d love to offer you a free, no-credit-check mortgage estimate by clicking the button below or visiting ModusMortgage.com/Free-Estimate.

Your Guide to Homeownership

When it comes to buying your first home, one thing is for sure: you’re going to have to make a lot of choices. Some of those are entirely up to you and your personal preferences: neighborhood, style, one-story vs two-story, or what color to paint the front door. On the other hand, though, there are going to be a lot of choices to make that might end up confusing or even overwhelming to a first-time buyer. Should you go with the predictability of a fixed-rate mortgage or the options of an adjustable-rate? Does an FHA loan make the most sense? What does the USDA have to do with mortgages?

Below are a few tips and guidelines to get you started. If you have more specific questions about mortgages or mortgage jargon we have more information available in our resources and learning center tabs.  When you’re ready to take the next step, we’d love to offer you a free, no-credit-check mortgage estimate by clicking the button below or visiting ModusMortgage.com/Free-Estimate.

Mistakes to Avoid

Buying a home is one of the biggest financial decisions you’ll make in your life — and one of the largest sources of stress for many first-time buyers is the financing process. Here are some common mistakes to avoid.

Not Understanding the full cost of homeownership

As a first-time home buyer, you’re probably accustomed to the monthly cost of renting, which usually includes your rent payment, some of the utilities, and your internet and cable bills. As a homeowner, you’ll be responsible for additional monthly costs that may have been covered by your landlord.

Assuming you won't qualify

Many renters think they can’t afford to buy a house because they haven’t saved enough to pay a 20 percent down payment. But you might be surprised to see what kind of house you could potentially buy based on the amount you spend every month on rent.

Getting pre-qualified at the last minute

Pre-qualification can help you shop in your price range, act fast when you find a house you want to make an offer on, and catch — and correct — any errors on your credit report before they cause a problem with your loan.

Only talking to one lender

Many home shoppers use a lender who was recommended by a friend, family member or real estate agent, and they don’t bother shopping around. But that doesn’t guarantee you’ll get the best rate, or even get a lender who is experienced with loans for your particular situation.

Spending your entire budget

When a lender provides a pre-approval or pre-qualification letter, they’ll typically include the maximum amount they will lend you. But just because a lender will let you borrow a certain amount doesn’t mean you should spend it.

Not researching down payment assistance programs

Saving for a down payment is often cited as the biggest hurdle to homeownership for first-time buyers. But did you know there are thousands of down payment assistance programs in the U.S.? These programs typically offer “soft” second or third mortgages or grants which allow for zero percent interest rates and deferred payments.

Mistakes to Avoid

Buying a home is one of the biggest financial decisions you’ll make in your life — and one of the largest sources of stress for many first-time buyers is the financing process. Here are some common mistakes to avoid.

Not Understanding the full cost of homeownership

As a first-time home buyer, you’re probably accustomed to the monthly cost of renting, which usually includes your rent payment, some of the utilities, and your internet and cable bills. As a homeowner, you’ll be responsible for additional monthly costs that may have been covered by your landlord.

Assuming you won't qualify

Many renters think they can’t afford to buy a house because they haven’t saved enough to pay a 20 percent down payment. But you might be surprised to see what kind of house you could potentially buy based on the amount you spend every month on rent.
Couple-hugging

Getting pre-qualified at the last minute

Pre-qualification can help you shop in your price range, act fast when you find a house you want to make an offer on, and catch — and correct — any errors on your credit report before they cause a problem with your loan.

Only talking to one lender

Many home shoppers use a lender who was recommended by a friend, family member or real estate agent, and they don’t bother shopping around. But that doesn’t guarantee you’ll get the best rate, or even get a lender who is experienced with loans for your particular situation.

Spending your entire budget

When a lender provides a pre-approval or pre-qualification letter, they’ll typically include the maximum amount they will lend you. But just because a lender will let you borrow a certain amount doesn’t mean you should spend it.

Not researching down payment assistance programs

Saving for a down payment is often cited as the biggest hurdle to homeownership for first-time buyers. But did you know there are thousands of down payment assistance programs in the U.S.? These programs typically offer “soft” second or third mortgages or grants which allow for zero percent interest rates and deferred payments.

The Buying Process

Step 1: Find a home

Step 2: Consider your financing options

Step 3: Make an offer

Step 4: Have the home inspected

Step 5: Close-or move on

The Buying Process

Step 1: Find a home

Step 2: Consider your financing options

Step 3: Make an offer

Step 4: Have the home inspected

Step 5: Close-or move on

Congratulations, New Homeowner! Now What?

You’ve signed the papers and paid the movers, and the new place is starting to feel like home. Game over, right? Not quite. Homeownership costs extend beyond down payments and monthly mortgage payments. Let’s now go over some final tips to make life as a new homeowner more fun and secure.

Keep saving

With homeownership comes major unexpected expenses, such as replacing the roof or getting a new water heater. Start an emergency fund for your home so that you won’t be caught off guard when these costs inevitably arise.

Perform regular maintenance

Regular maintenance can decrease your repair costs by allowing problems to be fixed when they are small and manageable.

Ignore the housing market

It doesn’t matter what your home is worth at any given moment except the moment when you sell it.

Don't rely on the sale of your home to fund your retirment

Even though you own a home, you should do your best to save the maximum in your retirement savings accounts every year. Although it may seem hard to believe for anyone who has observed the fortunes that some people made during the housing bubble, you won’t necessarily make a killing when you sell your house.

Congratulations, New Homeowner! Now What?

You’ve signed the papers and paid the movers, and the new place is starting to feel like home. Game over, right? Not quite. Homeownership costs extend beyond down payments and monthly mortgage payments. Let’s now go over some final tips to make life as a new homeowner more fun and secure.

Keep saving

With homeownership comes major unexpected expenses, such as replacing the roof or getting a new water heater. Start an emergency fund for your home so that you won’t be caught off guard when these costs inevitably arise.

Perform regular maintenance

Regular maintenance can decrease your repair costs by allowing problems to be fixed when they are small and manageable.

Ignore the housing market

It doesn’t matter what your home is worth at any given moment except the moment when you sell it.

Don't rely on the sale of your home to fund your retirment

Even though you own a home, you should do your best to save the maximum in your retirement savings accounts every year. Although it may seem hard to believe for anyone who has observed the fortunes that some people made during the housing bubble, you won’t necessarily make a killing when you sell your house.

Louie Flores

Steve Fisher

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