First-Time Homebuyer

Explore your financing options

Most first-time homebuyers will need to finance at least a portion of their home purchase. There are presently programs that allow as little as 3% or 3.5% down. Generally speaking, it may take longer for prospective buyers to save for a down payment versus years past, but don’t let that discourage you. If you’re struggling with producing 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, contact three or more financial institutions to get the best terms and conditions for your mortgage. Discover what first-time homebuyer programs are available to you. Understand there are local and state-run assistance programs for first-time homebuyers, which can provide additional relief. In Lackawanna county there’s housing assistance available as well as homeownership programs in surrounding counties, such as Luzerne county. The PA Housing Finance Agency (PHFA) has assistance programs for homebuyers. The city of Scranton also has a homebuyer assistance program.

It’s important to determine how much home you can afford when reaching out to lenders. Based upon your present income, expenses, etc., you can ascertain your price range and discover your monthly mortgage budget. Our mortgage calculator can aid you with this.

Mortgage payments consist of a basic payment – the principal on the loan in addition to its interest – taxes and insurance. Contact lenders for comparison and pay special attention to your mortgage rates. Furthermore, figure out 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, govern what your price range is (aka how much home you can afford).

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

Home shopping with confidence

Employ a REALTOR® yet? If not, no worries. 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 interested in, has experience with the market, is motivated and is available to meet your needs. You should have a rapport with this agent since you may be spending considerable time together over the next few weeks or months. It’s advisable when considering two or more agents, that you compare their reviews and past sales. Insert shameless plug: We have REALTORS® who are some of the very best in the Greater Scranton area. Meet your agent in our family of real estate professionals.

Once you identify your agent, you’ll want to sign a buyer’s agency agreement to ensure there’s a business relationship and the agent has your best interests at heart.

With your pre-approval and buyer’s representative, you can shop for your starter home with confidence. Your initial property search may have begun months ago online, but now you’re in serious pursuit of a home. Research the neighborhoods and school districts you’re most interested in, look into amenities you’ll use, review crime statistics and start previewing 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 real estate agent. Depending on the market conditions, if there’s a demand for housing, you may be in no position to delay submitting an offer and may need to move quickly.

If you’re looking to purchase your first home, check out these other pointers as well.

Tips to help you avoid pitfalls

Real estate is complicated, but as a first-time homebuyer, your real estate agent will guide you through the process to ensure 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 an updated pre-approval.
• Are you thinking about your future needs, especially short-term, in your search for a home?
• Always consider the resale value and if the home you’re buying will be desirable to future buyers.
• Do you have enough money set aside for your closing costs and funds you would need for appliances, furnishings, home improvements, etc.?
• Assume all repair/renovation costs will be more than estimated and 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.
• Some other common mistakes to avoid, including additional homebuyer tips