First-Time Home Buyer’s Guide

    Buying your first home is an exciting process that can be scary at times, but it doesn’t have to be if you do your homework. When you are planning to buy in the Jacksonville area, there are several steps to take beginning about a year prior to purchase. This guide offers a 12-month timeline to guide you through the process and give you some tips along the way.  But first, you should know who qualifies as a first-time home buyer because they often have access to special programs. Here is the first-time home buyer’s guide that covers information you should know when shopping for real estate.

    Who is a First-Time Home Buyer?

    The Federal Housing Administration (FHA) defines a first-time home buyer as one who meets the following conditions:

    • an individual who has not owned a principal residence for three years prior to the closing date of the property
    • an individual who has only owned a home jointly with a former spouse
    • an individual who has only owned a permanent residence that did not have a foundation or that did not comply with state, local, or model building codes and the expense to comply was more than the cost of building a permanent structure

    One Year Prior to Purchase

    When you finally decide that you are ready to buy your first home, there are several things to consider that require you to do some research and make some decisions:

    • What kind of home do you want? Specifically, which type of home will fit your needs and what features are important to you?  You have several options such as a single-family home, duplex, townhouse, or condo. In terms of features, you need to decide things that you desire such as the layout of your home, the size of the kitchen, whether or not you have a swimming pool, and the number of bedrooms.
    • Where do you want to live? Research the neighborhoods in Jacksonville and the surrounding areas and come up with one or two ideal locations. Also, do you want a beachfront home or do you prefer to live away from the water?
    • Get a copy of your credit report at annualcreditreport.com and check your credit score. Check for any mistakes and correct them as soon as possible.
    • How much can you afford to pay for your first home? You need to take the time to look at the total costs for your new home, which include more than the monthly mortgage payment. Property taxes in Florida are at or below the national average. Duval county’s rate is about 1% of the purchase price. For more exact numbers use a Florida property tax calculator. Consider the cost of any home improvements and maintenance and how much your closing costs will be. Also, if you are purchasing a condo or a townhouse, you will pay monthly fees to your homeowner’s association.
    • If you haven’t saved for a down payment, start now. Don’t touch the money once you put it in savings. Banks like to see stable funds in your savings for 60-90 days before applying for a loan. Most conventional mortgages require 20% down, but FHA loans for some properties require as little as 3.5% down. The Florida Housing Finance Corporation also has first-time buyer programs.

    9 Months Prior to Purchase

    • Start visiting open houses. You have already researched neighborhoods and thought about the features that are important to you. Take the time to visit some open houses so you can dig a little deeper into your options. Consider the cost of living, public transportation, schools, parks, and other points of interest in your chosen neighborhood. Also, pay close attention to specific layout features such as the number of levels and the openness of the floor plan.
    • Start a home maintenance account. Saving for your down payment should be your number one priority, but if you have extra, you should start to save for maintenance, repairs, and emergencies for your home. You don’t want it to hurt later on, nor do you want to pay credit card interest on these things.

    gated community houses in Florida with palm trees

    6 Months Prior to Purchase

    • Get your financials together. Mortgage lenders require loads of paperwork, so you will need to gather the following things.
      • W-2 forms for the past two or three years–business tax forms if you are self-employed
      • Individual tax returns for at least the past two years
      • A month or more of recent pay stubs
      • Credit card, loan, and bank statements
      • Residence history that includes addresses for the past five to seven years
      • Two to four months of recent brokerage account statements
      • Recent retirement account statements for 401(k), SEP, Roth IRA, etc.
    • Find a reputable real estate agent. You especially want to look for a buyer’s agent that works with first-time home buyers. He or she will guide you through the process. Plus, they will know all of the ins and outs of the FHA programs and Florida programs for first-time home buyers. You can search for your own lender, but it’s easier and often better to work with the lenders that your agent suggests, especially as a first-time home buyer whom may be doing a non-conventional mortgage. You want an agent and lender team that knows how to put a package together.

    3 Months Prior to Purchase

    • Get pre-approved for your loan. You already have all of your paperwork in order, so when you meet with your lender you will be ready for them to run your credit and let you know how much they will give you.
    • Start shopping. The fun part is here. The time has come to take all of your research and have your real estate agent start showing you houses that are in your price range and have the features you desire.

    2 Months Prior to Purchase

    • Make an offer on the home that you want. Expect to wait four to six weeks to close on your new home after an offer is accepted. Allow extra time for delays, especially when deciding your move-out date.
    • Get a home inspection. After the seller accepts your offer, the first thing you need to do is order a home inspection to check for any repairs that may need to be taken care of before closing. When buying in Florida, you must pay special attention to checking for mold and moisture problems that could be hazardous to your health.

    1 Month Prior to Purchase

    In the last month before you close, most of the heavy lifting is finished. However, you do have a few things left to do.

    • Make sure all of your financial documents are in order, and then check again, and then check one more time. If you miss something, it could mess up the closing. Review all the lending documents; ask your agent for help if necessary.
    • Get homeowners’ insurance. You will be required to prove you have insurance at closing.
    • Get a cashier’s check for funds needed at closing. Make sure it is the exact amount needed. You will get that number a few days ahead of time.

    Attend the closing and pick up the keys to your new home!

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