First Time Buyer in Orlando; Understanding the home buying process.

First Time Buyer in Orlando; Understanding the home buying process.

Are you a first time buyer in Orlando?  This is a brief over-view of the home buying process for the first time buyer in Orlando.

What are the benefits of Buying a Home in Central Florida?

A home is the largest financial asset most people have due to equity overtime.  Homes generally appreciate and you have the capability to build equity every month.  Another benefit is you could deduct mortgage interest and property taxes and buying is usually cheaper than renting, in the long run.

Is Now a Good Time to Buy a home in Orlando?

Mortgage rates are still competitive but as with anything that could change at any point.  Home prices have been appreciating steadily over the past several years.

First time buyer in Orlando

Deciding to buy a new Central Florida home

Buying your first home is an emotional decision and is likely to be one of the most important decisions that you’ll make in your life-time.

Steps to buying a first home
1.)Establish a housing budget
2.)Research local market, home prices, etc.
3.)Get pre-approved for a home loan
4.)Find a good real estate agent
5.)Start looking at houses
6.)Make an offer based on comps
7.)Negotiate with a maximum price in mind
8.)Have the home inspected
9.)Attend the closing (and sign lots of paperwork)
10.)Get the keys to your new house!

First time buyer in Orlando

What to Do Before Buying applying for a mortgage

The first thing a borrower should do before going to their bank or mortgage broker is to acquire a copy of their credit report and check it for errors. There is no fee to check and by law you are entitled to one free credit report every year from each of the “BIG 3” credit rating agencies: Equifax, Experian and TransUnion.  Be on the lookout for debts that have already been settled, closed accounts and any information that isn’t yours.  If there are mistakes or inaccuracies you must take the necessary steps to fix them.

Knowing where you fall in terms of your debt to income ratio (DTI) is just as important as knowing your credit score when you are considering applying for a new home loan.  Your debt to income ratio can actually be the factor that determines whether or not the lender will consider you for a new home loan in the first place.

You’ll need to have some money saved for a down payment (see below) and closing costs.  Home buyers will typically pay between about 2 to 5 percent of the purchase price of their home in closing fees.

For today’s most widely-used purchase mortgage programs, down payment minimum requirements are:

FHA Loan: 3.5% down payment minimum.

VA Loan: No down payment required.

HomeReady™ Loan: 3% down payment minimum.

Conventional Loan (with PMI): 3% down payment minimum.

Conventional Loan (without PMI): 20% down payment minimum.

First time buyer in Orlando

Do I need to be Pre-Approved before a Realtor will show me houses?

Most realtors will not take you seriously as buyer until they see you are dedicated to your own home search.  It’s wise to get pre-approved before you start your new home hunt. It helps you identify any potential problems, and the real estate agent knows that you are serious.  It will also help sellers will take you seriously if you’ve been pre-approved!

Reasons to Use a Real Estate Agent in Orlando

Besides helping you find a home that meets your needs.  A good real estate agent can make the entire home search process easier for you by giving you valuable insight into the current market. This will help you to determine a good offer amount based on comps (comparable sales) in your area and negotiate with the seller.

How Much Should You Offer for a new home in Central Florida?

The first thing that you are going to want to do is review all comparable home sales in the area (i.e., “comps”).  Focus on recent sales prices for similar homes and know that the market determines what a home is worth, not the owner.  Be sure to factor in upgrades, such as a pool or renovated kitchen.  Also, rely on your agent’s expertise and market knowledge.   Support your offer with comps, if necessary.

Negotiating With Sellers

Have a maximum price in mind, and don’t exceed it.  Focus on the big picture, and don’t get too bogged down with little details that could sour the transaction between you and the home ‘seller.  Remember that it is a financial transaction, don’t let it become personal.

Benefits of a Home Inspection in Orlando

It helps you understand the true condition of the home.  It is relatively inexpensive for what you get in return and for the peace of mind that it can provide. The average home inspection costs around $315, with condos and small homes under 1,000 sq ft. costing as little as $200. Larger homes over 2,000 sq ft. will run $400 or more. Radon or mold testing will cost extra, but will typically cost less if you purchase them with a home inspection.  It is important to note that you can make your offer contingent on a home inspection.

Closing the Deal

 Closing the deal is the last step in the home buying process.  A few days before closing, borrowers will get a “closing disclosure” to review.  The transfer of ownership from the seller requires a lot of paper work signing.  Once everything is completed the sellers receive their proceeds from the sale and you the buyer get the keys to your new home. It is important to note that the buyer usually pays closing costs with a cashier’s check.


Ready to get your home search started?


Bryan Berns

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