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Owning a home is a lifelong dream for many people—and for us lucky Brevard County residents, owning a home close to the beach or our favorite river is a must! Thankfully, there are plenty of resources available to help first-time homebuyers invest in their dream homes. Before you get too involved in the process, here’s what you need to know so you can get started on the right foot.
Knowing When it’s the Right Time for You to Buy a Home
Before seeking mortgage pre-approval, it’s important to take an honest assessment of your current finances and your credit history. Your FICO credit score, credit history, and financial standing play a huge role in how much a bank will be willing to lend you, how much money you may need to put down, and what your monthly mortgage payments will be. If you know you have some bad marks on your credit, look into correcting them and while saving money for your down payment.
A FICO credit score is often used by lenders when they determine whether or not to provide you with a loan—this includes mortgages. There are many proprietary factors that go into determining a FICO score with the goal of providing lenders with an estimate of how likely you will be to meet your loan obligations. To learn more about FICO scores (all 28 of them) and how they are calculated, check out this informative PDF.
You can attain one free credit report from each of the three agency annually, though a FICO score isn’t provided. This should allow you to check for any errors on your report and to remedy them before applying for a mortgage. Also, keep an eye on your debt-to-income ratio (how much you owe vs. how much you make). Ideally, you want this to be lower than 40%.
Your home expenses should be about a third or less of your income. Keep this in mind as you look for a home.
The following is a quick overview of the home buying process. For a more in-depth understanding, make sure to speak with your Ocean To River Properties' agent.
1. Monitor the Market
Take a look at what’s for sale in Brevard County to get a realistic idea of current home and condo prices. This can help you determine whether it’s the right time for you to buy and help you prepare yourself financially for making your home-owning dream a reality. Browse databases like the one featured on our website and filter it by price or size so you can see comparable homes or condos.
2. Get a Mortgage Pre-Approval
If you’re ready to purchase within the next 90 days, it’s time to get pre-approved for a mortgage. You can speak with our mortgage guru Norman Bocci who has extensive experience with first-time homebuyers or visit your favorite loan officer. A pre-approval is generally good for 90 days and requires that you share your financial information, including your W-2s, pay stubs, bank account statements, and more. A soft check will be run on your credit to ensure creditworthiness. Once you’re pre-approved, you’ll be given an amount to work with.
3. Choose Your Agent
Your agent is your guide through the world of real estate. With extensive knowledge about the real estate market, the home buying process, and the area, they will function like a partner who shares the same goal—to get you into your dream home. Your agent will help you find homes or condos that meet your needs and check off all your boxes within your price range. They’ll help make the process clear for you so you can stay informed and make the best decision possible. A skilled Ocean To River Properties' agent knows just how important buying your first home is and they’ll help in any way they can.
4. Find Your Dream Home
Since you’ve already been monitoring the market, chances are you’ve seen a couple of jewels that stand out and possibly make your heart go pitter-pat when you think about moving in and enjoying your new space. Once you know what you can afford, it’s time to consider what type of home is suitable for you. Are you dreaming of a condo with ocean views? A lovely ranch home in Rockledge? Are you looking to live in a certain community or within a particular distance from work? Think about what you need in terms of space and location. Your agent can help you get the inside scoop and open doors so you can get the best information about each space you’re interested in.
5. Make an Offer
Once the stars align and you find that home or condo that perfectly fits the bill, your agent will help you make an offer and negotiate with the seller. They’ll keep your best interests in mind and keep you informed throughout.
6. Sign & Close!
Once your offer is accepted, the home will go into escrow. A home inspection will be completed and the seller will fix any issues if needed. Paperwork will appear and you will need to apply for a mortgage with the lender that issued your pre-approval. Once everything is approved, it’s time to sign the contract and loan documents. Once the loan transfer occurs, you’ll be the happy owner of your first home!
Buying a home can be an exciting process. While mentally decorating during open houses until you spot your dream home can be fun, learning about mortgages and financing is slightly less exhilarating. With the skilled Ocean To River Properties team by your side, you can be sure that all your questions will be answered. If you’re ready to learn more about buying a home for the first time, contact us today!