First-time homebuyer

Don’t be intimidated by the process of buying a home, especially if it’s your first time. It can be a little daunting when considering a home purchase, never having done so before. With that being said, you can put yourself in a position to succeed by reading the following, doing a little research, downloading our free first-time homebuyer brochure and contacting your REALTOR®.

Explore your financing options

Most first-time homebuyers will need to finance at least a portion of their home purchase. There are presently some programs that allow as little as 3% or 3.5% down. Generally speaking, it takes longer these days for prospective homebuyers to save for a down payment, but don’t let that discourage you. If you’re struggling with coming up with a down payment, look into Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans. Fannie Mae also has two low down payment options through their HomeReady mortgage program and the Conventional 97.

As you begin the process, make sure to contact three or more mortgage lenders to get the best terms and conditions for your mortgage. You’ll want to see what programs are available to you. Understand that there are local and state-run assistance programs for first-time buyers, which can provide additional relief. In Lackawanna county there’s a first-time homebuyer assistance program available as well as other surrounding counties, such as Luzerne county. The PA Housing Finance Agency (PHFA) also has assistance programs for homebuyers.

It’s important to understand how much home you can afford when reaching out to lenders. Based upon your present income, expenses, etc., you can determine what’s in your price range (aka what’s your monthly mortgage budget). If you need help figuring that out, check out our mortgage calculator.

Mortgage payments are made up of a basic payment – the principal on the loan in addition to its interest – taxes and insurance. When contacting lenders for comparison, pay special attention to your mortgage rates. Furthermore, discover if you have the ability to pay down the rate with discount points, acknowledge your credit score and find ways to improve it, both short and long term. Your mortgage rate will, in a sense, determine what your price range is (aka how much home you can afford).

Finally, you’ll want to equip yourself with a pre-approval letter from the bank/lender that you choose, then touch base with your REALTOR® and dive into some serious home searching.

Home shopping with confidence

You don’t have a REALTOR® yet? That’s not a problem. Searching for the right fit for you (and your family) shouldn’t be stressful. May we suggest finding a real estate professional who is knowledgeable about the neighborhood(s) you’re interest in buying, has experience with the market, is motivated and is available to meet your needs. Keep in mind, you should have a rapport with this agent – you may be spending considerable time together over the next fews weeks or months. It’s also advisable when considering two or more agents, that you compare their reviews and past sales. Now’s the time for our shameless plug: We have many REALTORS® who are some of the very best in the Greater Scranton area. Find your agent in our family of real estate professionals.

Once you discover your match, you’ll want to sign a buyer’s agency agreement to ensure there’s a business relationship and that the agent you selected is working for your best interests.

Once you have your pre-approval from your lender and a buyer’s representative (agent), you can shop for your starter home with confidence. Your initial property search may have begun months ago online, but now you’re serious about finding a home. Be sure to research the neighborhoods and school districts you are most interest in, look into amenities that you’ll use, check on the crime statistics and start seeing homes!

When you locate that special home, do a drive-by, experience the neighborhood during the day and at night. If it’s a great fit, get moving on the paperwork with your agent. Depending on the market conditions, perhaps there’s demand for housing, you may be in no position to take your time submitting an offer and may need to move quickly.

Tips to help you avoid pitfalls

Real estate is complicated in general, but your agent will guide you through the process to ensure that you keep the following in mind:

  • Do your homework and look to those first-time homebuyer assistance programs.
  • Get multiple rate quotes from mortgage lenders.
  • Don’t shop for a home before you have your pre-approval.
  • Are you thinking about your future needs, especially short-term, when your serious about your home search?
  • Always consider the resale value and if the home you’re buying will be desired by future homebuyers.
  • Do you have enough money set aside for your closing costs and even funds that you would need for appliances, furnishings, home improvements, etc.?
  • Assume all repair/renovation costs will cost more than estimated – don’t miscalculate them.
  • Don’t pass up an opportunity to negotiate with the seller, if appropriate.
  • Don’t make any large purchases or apply for credit prior to settlement.