First time homebuyers can fuel housing market, but they need to understand the process
Posted on Wednesday, July 29, 2015 at 10:05:06 AM
First-time buyers are getting back into the housing market, and they're expected to spur the housing recovery forward. In fact, in May the share of the purchases completed by first-time buyers reached 32 percent, the highest since September 2012, according to the National Association of Realtors.
But, how does this segment of prospective homebuyers prepare for their first foray into the residential financing and homebuying processes?
Patrick Deady, vice president of Home Loan Investment Bank's residential mortgage division, suggested attending a seminar.
"First time buyers can prepare for the process of buying a home by attending a seminar online or checking with their local state housing agency to see if there is a seminar in their area," he explained.
"Once they have attended a seminar they should schedule an appointment with a local mortgage professional to review their credit and finances to see how much home they can afford. The review is generally referred to as a pre-qualification or pre-approval."
Deady noted that there are ten steps between making the decision to buy a home and closing. They are:
- Educate yourself on the mortgage process.
- Get pre-qualified by a mortgage professional.
- Hire a professional Realtor to help you look for a home.
- Gain an accepted offer on the house that you've chosen.
- Sign a purchase and sales contract.
- Prepare a formal mortgage application.
- Have a professional come by to inspect the home.
- Make sure all of your financing is prepared per your sales contract.
- Purchase homeowner's insurance for the closing.
- Close on your new home.
First-time buyers who get these steps down can prove a huge boon to the housing market in the coming years, and they've already started making contributions. Deady explained how these new homebuyers help the market grow.
"First-time homebuyers benefit the housing market by acquiring existing first-time buyer homes, which will allow those folks to buy up," he said. "In essence, new first-time buyers allow the market to expand."