This post may contain affiliate links. I earn a small commission on purchases made though those links.
Disclaimer: I am not offering any finical advice nor am I a realtor, I am simply sharing our journey and the steps we took to purchase our home.
We have some very exciting news…We’re building our first home! I can not even believe I just wrote that. As a 24 year old Mom I did not expect to say those words for a very long time. I feel so incredibly blessed!
My husband and I have been planning on buying a home ever since having children. Starting a family made buying a home a huge priority. It’s something that’s been on our hearts and minds since our first son was born.
As young parents of almost three children we really did not know how soon something like this would actually be able to happen. We had no idea what to expect when we started this journey because like most things in life, it’s hard to find a step by step guide to things like house buying, credit scores, parenting so-on and so-on.
Here are some things we’ve learned on our journey to first time home buying. Here are the steps we took in order to purchase our home as young parents.
1. Check/Build Your Credit Score
If you plan on buying a home sometime in the future start working on your credit now. I can’t stress this enough, when starting the home buying process we knew credit played a factor, but being that we had this goal in mind for years prior to starting this journey we had slowly been working on improving our credit scores.
That way when we were ready to buy a house we were prepared, there was no potential delay or ‘come back when your score improves’ type of run in.
We had no clue what our scores needed to be but we knew they had to be good. Once we both had what we thought was decent credit we started talking to mortgage leaders only to learn that here in Texas all you need to get approved for a loan was a 560! (I’m sure there are different requirements that vary by state)
2. Pay Down Debt
Before you try and get approved for a home loan, check your debt. Typically your debt usage should be around 20% of your credit limit. Lenders will definitely take your income to debt ratio into account before approving you for a certain amount.
The great thing about paying down debt is that it’ll also help improve your credit score! Two birds one stone kind of deal!
During this time of of pre-approval and being approved try not to add anything to your credit at all. This can completely mess with your loan, even if you’re already approved.
3. Save Money
Home buying is an expensive process, start saving as soon as possible to begin the process. Though the amount of money in your bank account doesn’t decide if you can or can’t buy a home, you will probably need money to cover things like down payment and closing costs.
These things, depending on your state laws can be helped! For example in Texas they have what’s call a First Time Home Buyers Loan which leaves little or sometimes no down payment for the buyer. If that is not an option for you another option would be asking your realtor about lender incentives or if the seller can cover a percentage of your closing cost.
I know the thought of all of this can be overwhelming but ask about your options with your mortgage lender to get a more clear idea of what you will need.
In all honesty, if our down payment and closing cost looked different for us right now, we might not be in the position we are in. I’m a big believer in everything will work out the way it’s supposed to, when it is supposed to.
4. Talk to a mortgage lender
When you and your partner both believe you have average or decent credit scores the first step I recommend, is speaking to a mortgage lender.
When speaking to your mortgage lender you’ll go over things like credit scores, annual income and debt. You’ll need W2s, paystubs, proof of address, IDs and a few other things like the different types of home loans you can get and what’s best for you. Ultimately what a mortgage lender does is tells you what you can afford!
Knowing your price range and what you will be approved for is pretty much key to this whole thing.
A lot of people just want to jump on Zillow find a home they think they can afford and start asking how to buy it, that’s kind of the backwards way of doing things.
Once you’ve been approved for a loan it’s a much quicker process to lock down the home you want (before someone else does) because you or your realtor will be able to approach the seller with your approval letter and say “Hey Seller, we love this house and we have the money to buy it” basically.
Once you know what you can afford, the fun begins!
5. Get A Realtor Finding your home
There are a few reasons why I recommend you get a relator.
1.) They are going to walk you through the process of buying and represent you by communicating with lenders and/or builders.
2.) They will help you find exactly what you’re looking for.
Relators pay for softwares similar to Zillow that the general public does not have access to that are able to see homes that are fresh on the market or not listed on general home selling websites.This offers more options to look at in your price range that are not easy for you to find.
In our case we knew we wanted to build a home. This processes is a bit more lengthy because, well the home needs to be built. When it comes to building a home you’ll have to look at different builders.
If you are going the build route, something to keep in mind is that all builders do things differently, some let you customize anything and everything, others don’t let you change their build at all.
The importance of understanding your price range
When you’re buying a home you probably have expectations of what you want and what it’s going to look like. If you’re like me you’ll probably have a whole Pintrest board dedicated to what you want your home to look like. I’d say, in general as your first home, those expectations are probably not going to be your reality and that’s OKAY! One day they will be!
In our situation, we knew we wanted to build a new home so when we started looking at builders websites in our price range after we’d be approved and we are so excited by the 3D home walk throughs we saw online, only to find out the homes we were looking at in our price range was updated with all the bells and whistles and actually wasn’t in our price range at all. Shocker!
What was in our price range was the same floor plan with NONE of the beautiful counter tops, flooring, doors, even the sink looked vastly different in the base model. Our expectations for what we thought we could afford with that builder was immediately crushed and that’s ok looking back on it, it’s kind of funny now.
It’s impoartant to evalute what is important for you to have in your home while keeping your price range in mind.
