YOU'VE NEVER BOUGHT A HOME BEFORE.
YOU'RE NOT SUPPOSED TO KNOW HOW.
Buying your first home is exciting.
It can also be overwhelming as hell.
You've got Realtors, lenders, family members, friends, social media and probably somebody at work who bought a house twelve years ago all telling you what you should do.
How much should you put down?
What credit score do you need?
Should you use FHA or Conventional?
What about USDA?
Are there first-time homebuyer programs?
How much house can you afford?
And probably the biggest question of all:
Where do I even start?
If we were sitting down together for the first time, I wouldn't start by showing you houses.
I wouldn't start by quoting you an interest rate.
And I definitely wouldn't start by telling you how much money a computer says you're qualified to borrow.
I'd start by getting to know you.
Because your first home should fit your life. Your life shouldn't have to fit your mortgage.
Pre-Approval Should Be an Education, Not Just a Letter
A lot of first-time buyers think the purpose of getting pre-approved is simply to get a letter so they can start looking at houses.
The letter matters.
But the education that should happen before that letter matters a whole lot more.
Before you start shopping, I want you to understand things like:
Approximately how much cash you'll need.
What your monthly payment may look like.
How property taxes and homeowners insurance affect that payment.
Whether mortgage insurance applies.
What happens to your payment if the purchase price changes.
What different loan options may be available.
What you should—and absolutely should not—do financially while you're buying the home.
The goal isn't simply to get you approved.
The goal is for you to understand what you're agreeing to.
How Much House Can You Afford?
That's one of the most common questions first-time buyers ask me.
But I think there's a better question:
How much house do you want to afford?
Those aren't necessarily the same number.
A mortgage approval is based on underwriting guidelines and financial information. It doesn't know everything about your life.
It doesn't know that you love to travel.
It doesn't know that you want to have children in two years.
It doesn't know that you spend every Saturday during football season traveling to games.
It doesn't know that having an extra few hundred dollars left over every month makes you sleep better at night.
You know those things.
That's why I want to have the conversation.
Just because you can qualify for a certain payment doesn't automatically mean that's the payment you should choose.
You Probably Don't Need 20% Down
This is one of those beliefs that refuses to die.
Some buyers still believe they have to save 20% of the purchase price before they can buy their first home.
That's simply not always true.
Depending on eligibility and circumstances, buyers may have access to Conventional, FHA, VA or USDA financing with substantially lower down-payment requirements—and certain eligible programs may offer financing without a down payment.
There may also be down-payment or closing-cost assistance programs available depending on where you live, your qualifications and the transaction.
But again, don't start with the program.
Start with you.
Sometimes putting more money down makes sense.
Sometimes keeping more money available after closing makes sense.
That's a conversation worth having before automatically emptying your savings account because somebody told you that's what responsible homeowners do.
Your Credit Score Is Important, but It Isn't Your Entire Story
Credit matters in mortgage lending.
There's no reason for me to pretend otherwise.
Your credit history can affect available loan options, pricing and whether you qualify.
But I don't want someone looking at a credit score from an app and deciding on their own that homeownership isn't possible.
Consumer credit scores and mortgage credit scores aren't always the same, and underwriting involves more than one number.
If there's an issue, let's understand the issue.
What happened?
How long ago did it happen?
What has happened since?
Is there something that needs to be addressed?
Does it prevent us from moving forward today?
If it does, what needs to happen next?
I'd much rather give somebody an educated answer than have them spend another two years renting because they convinced themselves the answer was no.
Don't Make Big Financial Changes While You're Buying a Home
Here's one that can save everybody involved a tremendous headache.
Once you're working toward buying a home, communicate with your lender before making significant financial changes.
Don't finance the furniture for the house you haven't closed on yet.
Don't buy the new truck because you think the mortgage is already approved.
Don't open three new credit cards to get discounts at the stores where you're buying things for the new house.
Don't move large amounts of money around without understanding what documentation may be required.
And if you're considering changing jobs, ask before assuming it won't matter.
Mortgage qualification isn't frozen the day you're pre-approved.
Certain information may be verified again during the process.
When in doubt, make the phone call.
I'd much rather answer a question that turns out not to matter than find out about something after it does.
Your Realtor and Lender Should Be Talking
Buying your first home involves a team.
Your Realtor has one job.
Your lender has another.
The title or closing company has another.
The insurance professional has another.
And you are at the center of all of it.
Those professionals should communicate.
When you're considering making an offer, your Realtor and lender may need to talk about financing, timing, closing costs or other pieces of the transaction.
When something changes, everybody who needs to know should know.
A first-time buyer shouldn't have to become the messenger running information back and forth between professionals who should already be communicating with each other.
There Are Going to Be Questions
Good.
Ask them.
There is no trophy at closing for pretending you understood something you didn't.
If I use a mortgage term you don't understand, stop me.
If a number doesn't make sense, ask me where it came from.
If something you're signing doesn't look like what we discussed, say something.
If your Realtor tells you something and you're wondering how it affects the mortgage, call me.
You're buying your first home.
Nobody should expect you to know everything about a process you've never been through before.
That's why you surround yourself with people who do.
Your First Home Doesn't Have to Be Your Forever Home
This is another place where I think first-time buyers can put unnecessary pressure on themselves.
You're not necessarily choosing the house where you'll spend the next fifty years.
You're making a housing and financial decision based on where your life is today and where you believe it's going.
Life changes.
Jobs change.
Families grow.
People relocate.
Priorities change.
Your first home can simply be the right home for this chapter.
There's nothing wrong with that.
The First Step Isn't Looking at Houses
I know looking at houses is the fun part.
But I would much rather spend some time together before you fall in love with one.
Let's understand the numbers.
Let's talk about your goals.
Let's look at the available options.
Let's identify anything that could become a problem before we're three weeks from closing.
And let's make sure that when you do start looking at homes, you're looking with confidence rather than wondering whether any of this is actually going to work.
You don't need to know everything before we talk.
That's the whole reason we talk.
Bring your questions.
Bring the things you're worried about.
Bring the things somebody told you that you're not sure are true.
Sometimes the best place to begin buying your first home isn't an open house.
It's a conversation.
Jarrod Manley
Mortgage Loan Originator
Jarrod Manley Mortgage Group
Direct: (614) 400-3339
Email: jmanley@smprate.com
Jarrod Manley Mortgage Group