First-Time Home Buying: A Guide

Before you start browsing listings, take a hard look at your finances. Lenders will scrutinize three key numbers: your credit score, your debt-to-income ratio (DTI), and your savings.

• Credit: Lender credit requirements vary by program, property, and the complete application.
• Debt-to-income: Qualification thresholds vary by program, automated underwriting findings, lender requirements, and the overall file.
• Savings: Plan for a down payment, closing costs, and other purchase expenses. A lender can explain the figures for a specific scenario.

A mortgage pre-approval is a lender's written commitment to loan you up to a specific amount, based on a review of your income, assets, and credit. It's different from pre-qualification, which is just an estimate.

Pre-approval gives you three major advantages:

1. You can review a lender's preliminary assessment of your information
2. You can identify documents a lender may request
3. You can discuss program requirements before making an offer

A loan officer can help you prepare documents so a participating lender can review your file.

With a lender review in hand, you can continue shopping with advice from the professionals you choose to work with.

When evaluating homes, think beyond the listing price. Consider:

• Property taxes: These vary significantly by location and can add hundreds per month to your payment.
• HOA fees: Association dues can add to the ongoing cost of homeownership.
• Condition: A home inspection can identify issues to consider before making a decision.
• School districts: Even if you don't have kids, good schools protect your resale value.

Local housing conditions can vary. Consider the property, contract terms, and advice from qualified professionals before making an offer.

Your offer should include:

• Purchase price
• Earnest money deposit and related contract terms
• Contingencies (financing, inspection, appraisal)
• Desired closing date
• Any items you want included (appliances, fixtures)

Once your offer is accepted, you'll enter the closing process. The timeline varies with appraisal, title, underwriting, lender workload, and the completeness of your file. Here's what happens:

1. Loan processing: Your lender verifies your documents and orders an appraisal.
2. Underwriting: An underwriter reviews your complete file and issues a conditional approval.
3. Clear to close: Once all conditions are met, you'll receive a Closing Disclosure with final numbers.
4. Final walkthrough: Inspect the property one last time before closing day.
5. Closing day: Sign the paperwork, pay closing costs, and get your keys!

Turn Times can help you understand the likely timeline after reviewing your specific scenario; no closing date is guaranteed before the file is reviewed.