A Guide for First-Time Home Buyers in 2022

A Guide for First-Time Home Buyers in 2022

Buying a property is a lot to take in, especially if you’re a first–time buyer. Before you embark on purchasing your first house in Missouri, it’s a good idea to have some first-time homebuyer recommendations on hand to guide you through the processes of finding the best mortgage lender possible. If it’s your first time buying or it’s been a long time since you last bought a home, these pointers can help you understand what it takes to become a homeowner.

The home buying process doesn’t have to be stressful or complicated if you know what to anticipate and how to search for mortgage lenders. Continue reading this guide to educate yourself as a first-time home buyer!

Calculate Your Budget

Homeownership is one of the most important financial choices you’ll ever make. Make sure you can afford the buying price of your desired home before you start visiting open houses.

According to experts, you should set aside 1% of your home’s worth each year to cover unforeseen repairs and routine upkeep. The additional cash will save you from using your credit card to pay for a roof leak on a wet day, a summertime air conditioning breakdown, or a broken dishwasher.

Most home buyers will require a loan to purchase a new property, which necessitates the search for a mortgage lender. Nothing is more frustrating than having your mortgage application refused when it comes to buying a house. This is why checking your finances before you start looking for a home is a crucial first step.

In addition to your salary, your credit ratings can make or break your homebuying aspirations. Maintaining a low credit balance, paying bills on time, and having a healthy mix of revolving, installment, and retail credit will help you move toward a credit score of 740 or better, which will help you get the best interest rates and the quickest loan approval.

Although the Federal Housing Administration (FHA) allows for credit scores as low as 500 (with a 10% down payment), a better credit score helps you qualify for mortgage programs that require only a 3% down payment.

However, if you want to avoid private mortgage insurance, you’ll need 20% down. FHA loans require 3.5% down, and some types of loans allow you to buy a house with no down payment. Government-backed USDA and VA loans let you finance 100% of the home price with no money down. Regardless of the size of your down payment, it’s a good idea to put aside a little extra to cover closing costs and any repairs that your home inspection might reveal.

Make Sure You Save For a Downpayment and Closing Costs


Make Sure You Save For a Downpayment and Closing Costs


Make sure you have your gift letter available when applying for a mortgage if you’re getting a financial gift from a relative or borrowing from a 401(k) for your down payment cash. If you have any cash on hand, make sure it’s in your bank account for at least 60 days before applying for a mortgage.

The amount of money you put down on the house is dictated mainly by the sort of loan you acquire. If you want to avoid paying private mortgage insurance, you’ll need a 20% down payment. FHA loans need only a 3.5 percent down payment, while other types of loans allow you to purchase a home with no money down.

Select a Mortgage Lender and Obtain Pre-Approval

When it comes to finding the perfect home, the majority of individuals take their time. In reality, the average home purchase in the United States takes around four months.

You’ll learn what’s vital to you in a new house in your price range, which communities you want, and what your deal–breakers are during the shopping phase. Few home buyers, however, like the financing process as much as they enjoy house hunting.

When it comes to financing their homes, most of those polled by the Consumer Financial Protection Bureau (CFPB) only selected one mortgage lender. Furthermore, a sizable majority waited to contact a lender until they had discovered the ideal property.

Pre-approval For a Mortgage


Pre-approval For a Mortgage


When you’re ready to buy a house, you should first apply for a mortgage. There are several advantages to having a preapproved mortgage loan. The mortgage lenders can assist you in determining the price range of a property that you can afford as well as the amount of money required for a down payment of conventional loans in Missouri and closing expenses.

You shouldn’t start looking for a home until you’ve determined how much you can afford. A pre-approval letter is also required if you want sellers and their real estate agents to take you seriously.

Pre-approval should not be confused with pre-qualification. A lender’s pre-qualification is an estimate of how much they’ll lend you. There are a lot of mortgage companies that can help you achieve this. Pre-approval is a more thorough evaluation of your financial status that informs you of the maximum loan amount a lender will accept.

Don’t Forget About the Costs of Relocation

Unless friends and relatives volunteer to assist you, you’ll need money to move. A truck, boxes, packing supplies, and even movers to place your furniture and things where you want them in your new house are all possible expenses. According to the American Moving and Storage Association, a local relocation costs $2,300 on average, while a long-distance transfer costs $4,300.

Many first–time home buyers don’t know this, but the seller almost always pays their agent and the buyer’s agent. So you can usually get help from a buyer’s agent free of charge.

Look For a Real Estate Agent

When it comes to purchasing a property, a real estate agent may be beneficial. Agents can not only identify houses for sale as soon as they are posted, but they also know the local property market. They can give unique insights that will help you choose the ideal home.

When looking for a real estate agent, contact friends and family for referrals, study internet reviews, and chat with a few different agents before choosing the ideal one.

Furthermore, property purchasers do not need to be concerned about the expense of a real estate agent. Although hiring a real estate lawyer isn’t always necessary, certain jurisdictions require you to hire one. If one is needed, your agent or realtor will be able to notify you.

If a real estate attorney is required in your state, don’t go with the lowest option. Consider this procedure in the same way you would choose a lender or an agent: seek suggestions, check reviews, and chat with a few different people before deciding.

While a home inspection is not required, it’s highly recommended. It helps you avoid any hidden problems that might affect your home value in years to come. On the other hand, a home appraisal will be required by your mortgage lender to confirm that the home value is consistent with the loan amount. Your appraiser will determine the home’s market value by looking at property values in the neighborhood and evaluating the home’s general condition.

On the other hand, a home appraisal may be required by your mortgage lender to confirm that the home value is consistent with the loan amount. Your appraiser will determine the home’s market value by looking at property values in the neighborhood and evaluating the home’s general condition.

Make an Appointment For a Home Inspection and Evaluation

The next step is to schedule the home inspection and appraisal after you’ve reached an agreement with the seller on the house’s purchase price. The home inspection will confirm that the house is up to code and that the foundation and roof are in good working order. 

Your home inspector will perform tests on systems such as plumbing and electrical and then present you with a complete report detailing the house inspection results.

Find The Best Missouri Mortgage Lender & Purchase Your Dream Home 

Are you ready to buy your dream home in Missouri? At A1 Mortgage, we understand how critical it is to select the best mortgage lender and lending program for your specific circumstances. Whether you’re purchasing your first home, relocating, or refinancing your current mortgage, our skilled staff has got you covered for all of your home purchasing & financing needs. Get in touch with our Missouri mortgage lenders today!

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