There is literally tons of information about home buying on the internet, but if you are a first time home buyer and a resident of Maryland, below I have included some resources and information to aid you in the process.
Below along with these resource links that may help you uncover the types of programs, grants, down payment assistance, is an outline of the steps, and a checklist before you begin your search.
Start here to learn about homeownership.
Let's review some reasons for homeownership:
Financial stability and growth in equity – knowing that your payment will stay constant throughout the life of the loan.
Privacy and control – It's comforting to have a sanctuary to call your own in addition to being able to renovate, add-on, and construct as you wish, there are no landlords to ask.
Build credit – keeping up with consistent payments will build your credit for other investments
Tax advantages – tax deductions are available for homeowners on interest payments that can effectively lower the cost of living.
Investment in an appreciating asset – while a brand new car loses value as soon as it is driven off the lot, long-term home values tend to increase.
Once you have decided that homeownership is something you are ready to pursue, the first step would be to find out whether you are financially able to move forward and exactly how much home you can afford. Here is a quick link https://www.mortgagecalculator.org/
Below is a visual that can help with outlining the steps in the process.
Homebuying Checklist below:
STEP 1
MAKE SURE YOU’RE READY TO MAKE THE MOVE
• Do you have a stable job?
• Do you plan to live in the same location for at least the next 5-10 years?
• Are you prepared to accept the responsibilities of homeownership?
STEP 2
CREATE A WISH LIST
Rank what’s most important to you:
Location: Suburbs, city, or country?
Size: How many bedrooms/bathrooms? A yard?
• School district
• Public transportation
• Commute distance/time
• Rental income opportunity
STEP 3
DETERMINE YOUR FINANCIAL STATUS
• Request your credit report from all three credit bureaus (Equifax, Experian and TransUnion). Correct any credit errors ASAP.
• Estimate your down payment. A 20% down payment is ideal to avoid paying private mortgage insurance.
• Calculate approximately 3-6 months worth of emergency funds for unexpected maintenance
STEP 4
COLLECT YOUR NECESSARY DOCUMENTS
• Gather proof of employment, including pay stubs and tax returns from past two years.
• Print bank and investment account statements from past 90 days.
• List your previous addresses of residence and current landlord’s contact information.
STEP 5
RESEARCH LENDERS AND MORTGAGE OPTIONS
• Gather quotes from lenders, comparing rates, fees and terms.
• Get pre-qualified for a loan to show sellers you’re serious.
• Obtain a pre-approval letter.
NOTE: This requires a credit and background check, but it can strengthen your buying position. In a tight seller’s market obtaining a full pre-approval letter before starting your home search will send any sellers a message that you are a serious buyer and this will strengthen your offer when you are ready to purchase. Homes can move very quickly and having a pre-approval will ensure you don’t waste any time and miss the opportunity for the home of your dreams
When you are ready to move forward, we are here to assist you in your quest for the American dream of homeownership.
Resources: