Buying A New Home

Buying a new home can be a very overwhelming experience, especially if you are a first time homebuyer. Take the proper steps so you can propertly make a wise decision in both your short and long term goals.

Plan your budget. Don't get over your head in debt. Just because you can afford a $1,500 house payment right now doesn't mean you should have one. I see this a lot with first time homebuyers. They get their first real job out of college and they want to immediately go out and buy a home that causes them to live paycheck to paycheck and not be able to save anything. Don't fall into this trap. What if you just move into your home and you immediately have to replace your heater and AC. Or re-do your plumbing. You could easily be out-of-pocket several thousand dollars. Most first time homebuyers cannot afford that expense after just putting down a lump sum for closing cost on the home. A good rule of thumb is most people should take a loan out of no more of 2.5 times their annual salary. So if you make $40,000 a year, a $100,000 home would be an affordable home. Take into consideration other debt you might have. You you have a lot of car loans, student loans, or any other kind of debt, you might not take that large of a loan out. But if you have very low debt, you might would be ok going up to a $120,000 loan.

Get a real estate agent you are comfortable with. You can elect not to use a real estate agent to cut cost down but the process will be more time consuming. If you feel the agent you are working with is being too pushy or not wanting to give you much time, call another agent. There is plenty of Oklahoma real estate agents that would be more than happy to help you out. With the economy the way it is, there is a lot of great agents that don't have that much business coming in.

Find a mortgage banker or mortgage broker. There's a lot of great mortgage companies around town. Usually if you're working with a realtor, they will have a couple people they refer business to. We personally use ZFG Mortgage due to their great customer service and high work ethic.

Be prepared to submit a lot of paperwork. Applying for a loan is not a simple process. But it doesn't have to be hard either. When you talk with the mortgage company, you will be given a list of different items you will need to bring to them to determine your income and your debt-to-income ratio. This will allow them to determine what amount you will be pre-approved for on a loan.

Find a closing company. Usually your mortgage broker or banker will have a list of closing companies they refer to or you can choose your own. There's not a huge difference in most the companies so don't stress out over this.

Once you have your closing date for your home loan, start shopping for home insurance. Call multiple companies. Their is so many factors that make up your Oklahoma home insurance rate that the price you are quoted could vary hugely from one company to the next. If you're currently with an agent or a company on your Oklahoma home insurance, it would be a good time to shop around.

Do inspections. Home inspections for the structure of your property are relatively inexpensive and can you save you a lot of money in the long run. If you get into buying a home that is not structurally sound, you will be up the creek without a paddle if you are not prepared.

Time to close! If everything clears on the home inspections, you're ready to close. If something comes up on the home inspections that is minor, use that to leverage the sellers of the home a little more.