Home Buying Basics

🏡 Home Buying Basics

*Real-World Guidance for First-Time Buyers Who Want to Get It Right*

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📘 Introduction: Let’s Talk About Buying a House

This post is built from my full course, Home Buying University: , where I walk you through the full A-to-Z of buying a home.

Homeownership is exciting—but it’s also a complex journey. This isn’t HGTV. You don’t just pick a house, get approved in 15 minutes, and move in the next day.

You need to:

* Prep your finances
* Understand how lending works
* Know what your Realtor and lender actually *do*
* Avoid deal-killing mistakes
* And close with confidence

Whether you’re a first-time buyer or just tired of renting, this breakdown will help you go from “I have no idea what I’m doing” to “I GOT THE KEYS!”

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🧠 Education First: Know Who’s on Your Team

🧑‍💼 Real Estate Agent (a.k.a. Realtor)

They help you:

* Find homes
* Provide market analysis
* Submit and negotiate offers
* Handle contracts, timelines, and paperwork
* Connect you to inspectors, lenders, contractors, etc.

🏦 Lender/Mortgage Officer

The person helping you get approved to *actually* buy the home.

Their crew includes:

* **Loan Officer** – Gathers documents, pulls credit, pre-approves you
* **Loan Processor & Underwriter** – Double check and verify everything before closing

Types of lenders: banks, credit unions, and non-bank mortgage companies.

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🧭 Step 1: Establish Your Foundation

Before you start the search:

* Define your **homeownership goals**
* Calculate your **budget/affordability**
* Make a list of **wants vs. needs**
* Pick your **ideal area** (and backup options)

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🤝 Find a Realtor

Where to Look:

* Social Media (#YourCityRealtor)
* Google Reviews
* Word of Mouth

Once You Find One:

* Share your goals
* Build a game plan together
* Map out your timeline from pre-approval to move-in

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✅ Get Pre-Approved (Don’t Skip This!)

Finding a Lender:

Use the same method as finding a Realtor. Or better yet—ask your Realtor for a few trusted recommendations.

What Is Pre-Approval?

It’s like a “green light” from a lender. They’ve reviewed your finances and credit and said, “Yep, this person can afford up to \$X.”

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🧾 What Lenders Look At:

CREDIT

* No hard rule, but 620+ is a common starting point
* 640+ opens more doors to assistance programs
* Some lenders can go as low as 580 or even 500 (but expect a tougher process)

INCOME

* You don’t need 2 years at the same job
* **Gaps in employment** matter more than job changes
* W2 (employee) and 1099 (contractor/self-employed) are both allowed

DEBT-TO-INCOME RATIO (DTI)
Your DTI = Total monthly debt ÷ Gross monthly income

Example:
If you earn \$6,000/month and your total debts (mortgage + car + credit cards) are \$2,000, your DTI is 33%.

Loan types cap DTI at different levels—some at 43%, others up to 50%.

Typical Docs You’ll Need:

* 2 years W2s or 1099s
* 60 days of bank statements
* 30 days of pay stubs
* IRS Tax Transcripts (can be downloaded online)

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💰 Financing Options: Loan Breakdown

Conventional Loan

* Great for stronger buyers
* No PMI after 20% equity
* Considered stronger in competitive offer situations

FHA Loan

* More lenient credit (as low as 580, sometimes lower)
* Higher debt ratios allowed
* Ideal for first-time or rebuilding buyers

VA Loan

* 100% financing, **no down payment**
* No PMI
* No property taxes if 100% disabled veteran
* Lower interest rates

USDA Loan

* 100% financing in rural areas
* Credit starts around 640

First-Time Homebuyer Programs

* Ask your lender if you qualify (often state-specific)

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🔎 The Home Search Process

Set Expectations:

* Most people don’t find the “perfect” house—it’s about finding the right one for *you*
* HGTV is not real life. You’re not picking from 3 staged homes in 30 minutes

Searching Tools:

* MLS, Zillow, Realtor.com, Trulia

Viewing Homes:

* Take your time, ask questions, take notes

Making an Offer:

* Submit earnest money (good faith deposit)
* Add contingencies (financing, inspection, appraisal)
* Prepare for negotiations

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📑 Under Contract

This is when the real magic (and real stress) happens.

✅ What You Need to Do:

* Schedule home inspection
* Order termite inspection (AL loves termites)
* Get repair requests submitted (if needed)
* Respond quickly to lender requests
* Set up utilities
* Prepare for final walkthrough

❌ What *Not* to Do (Seriously, Don’t Do These):

* Don’t open new credit cards or apply for loans
* Don’t co-sign anything for anyone
* Don’t make late payments
* Don’t switch jobs (unless it’s a raise—check with lender first)
* Don’t **spend large sums of money** (keep your reserves intact)
* Don’t **deposit random/suspicious money** into your account—lenders need to “source” every dollar
* Don’t ghost your lender or agent—they need you active and responsive

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✍️ Closing Day

* Meet with the title company or closing attorney
* Sign mortgage documents and deed
* Grab your keys. Celebrate. Cry happy tears.
* Take a pic for the Gram 📸 #NewHomeWhoDis

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🔧 After Closing

Don’t Forget:

* Apply for your **Homestead Tax Exemption** (lowers future property taxes)
* Set up a monthly **home maintenance routine**
* Relax—you did that.