Horizons Homes & Hustle

Purchasing your first home is a great milestone. However, if you’re not sure where to begin, it can also feel daunting. Whether you’re dreaming of a cozy bungalow or a sleek condo downtown, this guide provides a step-by-step approach. It will help you navigate the entire home-buying process. You’ll move from pre-approval to closing with clarity and confidence.

Step 1: Assess Your Financial Health

Looking honestly at your finances before falling in love with your dream home. This includes:

• Credit Score: This is how lenders assess your loan eligibility. Strive for a score of 620 or more, as the most favorable rates are usually reserved for those exceeding 740.
• Debt-to-Income Ratio: Most lenders prefer a DTI of 36% or lower.
• Savings: You’ll need funds for a down payment (typically 3%-20% of the home’s price) and closing costs (2%-5%).

Pro Tip: Start reducing debt and increasing savings months before applying for a mortgage.

Step 2: Get Pre-Approved for a Mortgage

A pre-approval is a lender’s written estimate of how much they will loan you. This helps you:

• Understand your price range
• When competing with other purchasers, make your offer stronger.
• Spot and fix potential loan approval issues early

You must submit financial documents like W-2s, tax returns, and pay stubs. Choose a reputable lender, and don’t be afraid to shop for the best rate.

Step 3: Find a Trusted Real Estate Professional

Partnering with a professional real estate agent—especially one who’s experienced with first-time buyers—makes a huge difference. A great agent will:

• Help you find homes that match your needs and budget
• Negotiate offers and navigate contracts
• Connect you with local inspectors, lenders, and title companies

Tip: Don’t just go with the first agent you meet. Interview a few to find someone you trust and feel comfortable with.

Step 4: Start House Hunting

Now for the fun part! Make a list of “must-haves” and “nice-to-haves,” then tour homes (virtually or in person) with your agent.

Be open-minded—many first homes require a little imagination or minor improvements. You can compare properties and evaluate the benefits and drawbacks of each with the assistance of your agent.

Things to consider:

• Location & commute
• School district
• Neighborhood amenities
• Property condition & age
• Resale value

Step 5: Make an Offer

After you’ve located “the one,” your broker will assist you in creating a competitive offer that is predicated on:

• Market conditions (buyer’s or seller’s market)
• Home value comparisons (comps)
• Your pre-approval amount
• Seller motivation

Your offer will include your proposed price, financing method, contingencies (inspection, financing, appraisal), and a timeline for closing.

Step 6: Schedule a Home Inspection and Appraisal

After your offer is accepted, it’s time for due diligence:

• Home Inspection: A licensed inspector will assess the home’s condition, including its foundation, roof, plumbing, electrical, and HVAC.
• Appraisal: Your lender will order this to ensure the home is worth your pay.

If serious issues arise, you have options. You can negotiate repairs. You can ask for credits. You can even walk away, if you included an inspection contingency.

Step 7: Secure Financing

With a signed contract in hand, finalize your loan application. Your lender will:

• Verify your financial documents again
• Order an appraisal
• Process the loan through underwriting

Stay responsive to your lender’s requests; delays can push back your closing date.

Step 8: Review and Sign Closing Disclosures

You’ll get a Closing Disclosure a few days before to closing that includes the following information:

• Final loan terms
• Monthly payments
• Closing costs
• What to bring to closing

Review everything carefully, and don’t hesitate to ask questions.

Step 9: Close on Your Home

On closing day, you’ll meet with your agent, lender, and possibly the seller to:

• Sign all necessary documents
• Pay your closing costs and down payment
• Receive the keys to your new home!

Congratulations—you’re now a homeowner!

Final Thoughts

Purchasing your first home is an exciting, educational, and significant decision-making experience. Surround yourself with trusted professionals, take the time to understand each step, and don’t rush. The right home is worth the wait.

Michael Taylor, AB Permian Real Estate