How to Buy Your First Home 101 from the Experts at First Coast

Looking to buy your first home? You’re not alone. Buying a first home is on the rise.

JACKSONVILLE, Fla. — Buying your first home? You’re not alone.

The National Association of Realtors says first-time home buying has been on the rise for the past 2 years. If you want to do it yourself, we’ve put together a step-by-step guide with the help of local experts: a landlord, a real estate agent and a mortgage lender.

Ingrid Garcia Polanco has been in her new condo for about a month. She says it’s worth it.

She already makes him feel like hers with details of her Colombian roots emblazoned throughout. This is the second time she has bought a home, but last year she was a tenant.

“It’s too expensive,” she said of the rental. “I’d rather pay for my own house than pay for someone else’s house.”

“We always like to say you can’t build wealth in a home you don’t own,” CC Underwood said.

His Sellin’ Like CC team sells hundreds of homes each year in and around Jacksonville. She says affordability is still a big issue in the local housing market, but prices are starting to stabilize.

“You don’t want to wait,” Underwood said. “Now is an opportunity. If you are in the 400, 500 or even 350,000 price range, if you see an opportunity, jump on it.

A third of all homebuyers last year were buying for the first time, according to NAR. We’ve broken down the process into 8 main steps, with some important details and nuances in between.

1. Calculate your finances and credit score.

What can you afford? Here are some tips from Shauna Thompson, a Jax Federal Credit Union mortgage originator, on how to figure out what you can afford on a monthly basis for a home.

“If you’re renting now, just factor in your rent plus your property taxes, your home insurance, and if you have private mortgage insurance which can also be a monthly expense,” Thompson explained. “So if you’re comfortable with your rent, think an extra $2 or $300 can be added to that. It can kind of bump you up or down if you think you can afford a little more or if you want to go a little less than that.

“Budget and savings,” Polanco repeated.

In order to buy a home, you will need money for the down payment, closing costs and any inspections. We are talking about 15,000 and more. Here’s a quick breakdown of what you might expect to pay in cash.

  • Cash deposit (3% or more)
  • Closing costs (3-3.5% of purchase price)
  • Inspections ($1,000 for home inspection on average)

Check out online calculators like this one with USAA Where this one with Nerd Wallet.

2. Find a mortgage broker or lender.

They can tell you what you can afford and give you pre-approval for a mortgage, which you’ll need before you go looking for homes.

“Ideally, you want to come see me before you start looking,” Thompson said.
“Say hey, I want to look for a house.”

Thompson can tell you how much cash you will need and how much money you could get for your loan.

Underwood advises choosing a local lender, someone you can reach at all hours of the home buying process.

Thompson says you need to bring these documents when you come in for an appointment with a lender: ID, SSN, the last two years of tax returns, two months of bank statements, and the last two W2s.

3. Find a real estate agent

Find someone you trust, then have a buyer consult with your real estate agent so they know exactly what you’re looking for and your budget.

Then start looking, both online and in person.

Underwood says pre-approvals are generally only good for 90 days, so keep that in mind when looking.

4. Find free money.

“It was pretty easy and it was less than I expected,” Polanco said.

He’s a second home buyer, but you can also have a similar experience as a first-time buyer.

“Many states offer homeownership programs,” Thompson said. “They help with the down payment and closing costs. There is a partnership with the Federal Home Loan Bank of Atlanta. For eligible first-time home buyers, they can get up to $7,500 in funds for help pay for closing costs, down payments, advice and renovations. Things like that.”

This is just a program offered by Jax Federal Credit Union. Thompson says they have a program on top of that where you can apply for an additional $5,000 towards your down payment.

So check with your lender as well as your local government. Ask them what they can do for you!

Jacksonville and other cities and counties also have homeownership programs to help. Apply! Don’t leave free money behind.

Find more information about the Jacksonville Home Ownership Program here.

Check down payment assistance programs which operates statewide with the Florida Housing Finance Corporation.

5. Have you found accommodation? It’s time for control!

It will cost you money out of your pocket. If you find something, offer less than the asking price or put in stipulations for certain things to be fixed before you move in.

Your real estate agent should help you advocate for these fixes.

6. Make an offer!

Underwood says buyers have the power when the market corrects.

“It’s a great opportunity for buyers to go under the asking price. It’s also a great opportunity to ask the seller to pay closing costs,” says Underwood. “A lot of that money can be put into a rate buyout which I know will be very important for a lot of buyers right now.

7. Choose a mortgage

  • Conventional mortgage: Thompson says this is the one they use most often with first-time home buyers at Jax Federal. More information about this type can be found here.
  • FHA Loans: This type requires lower credit scores and smaller down payments. It’s intended to help people who typically wouldn’t be able to buy a home, but you’ll have to pay for FHA mortgage insurance on top of the mortgage insurance you normally pay if you put down less than 20 percent. More information about this type here.
  • USDA loan: If you are buying a home in a rural area, this loan might be for you. Find more information here.
  • VA Loans: Veterans and active military members buying a home may qualify for this type of loan. Find out more about this type of loan here.

8. Buy your first home!

You did it. Congratulations!

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