Empowering First-Time Buyers with Expert Insights and Tips

Are you prepared to unlock the secrets of the home buying process and avoid common pitfalls? Join us, Jenny and Lauren, as we promise to equip you with the essential knowledge needed for a smooth first-time home buying experience. We dive into the critical role of having a knowledgeable lender and discuss the importance of securing pre-approval before you even start your home search. We tackle the often-overlooked costs like closing costs, insurance, and taxes, which can be deal-breakers if not understood upfront. By gaining insights into the evolving nature of real estate transactions and the necessity of buyer-agent contracts, you'll become a more informed and prepared homebuyer.

Our discussion doesn't stop at finance; we also cover the practical aspects of buying your first home. From understanding insurance quotes and inspections to dealing with the sometimes misleading online photos, we cover it all. We highlight the learning curve for both buyers and agents in assessing the real amount of work a potential home might require. Building strong relationships with your lender and real estate agent is crucial, as they provide invaluable insights and financial estimates that can make or break your home buying journey. Tune in for practical advice that will empower you to embark on your home buying journey with confidence and clarity.

MOVE Worthy Podcast with Lauren Jones & Jenny Lendle. Together we have the experience to MOVE you forward!

Transcript

First-Time Homebuyer Loan Options and Advice

Speaker 1 0:12

okay , we are back with episode 13 . Oh my goodness um the move worthy podcast with Jenny and Lauren and today we're going to talk about first-time homebuyers . Who is a first-time homebuyer ? What should first-time homebuyers be doing ?

Speaker 2 0:34

What shouldn't they be doing ?

Speaker 1 0:36

Both yes and Lauren . I mean you're working with a couple of them , first-time buyers , right now . Right now how how , what does that look like and what should they be looking out for ?

Speaker 2 0:49

so I think it is super , super imperative that you have a knowledgeable lender and I don't just not just knowledgeable someone that can really go into depth . If you're calling a lender and they're saying , yes , I can pre-approve you and that's the end of the conversation , you need to not go with them . There needs to be way more detail and in-depth conversation with lenders and first-time homebuyers . There's so many things that they need to know and need to be aware of before they get into a buying process . I think that's , first and foremost , right .

Speaker 1 1:30

I think that happens a lot , unfortunately .

Speaker 2 1:32

It does .

Speaker 1 1:33

They're like oh , I'm pre-approved , and they call us .

Speaker 2 1:35

And they have no idea .

Speaker 1 1:36

And they don't know about closing costs . No , don't know what the insurances are going to look like .

Speaker 2 1:40

Nope .

Speaker 1 1:45

Only really know what a note might be based on . Might be just based on a sale price .

Speaker 2 1:47

Or just principal and interest . You know how many lenders will say oh yeah , oh , your . P&i . Oh yeah , they say P&I Like well , a first-time homebuyer has no idea what a P&I is , right , but they're saying a number and the first home buyer is taking that number and legitimately thinking that this is what I'm going to be paying if I'm shopping for a house that's $250,000 . You know well , that's not Add about . You know , $300 to $500 a month in insurance and taxes .

Speaker 1 2:15

Yes .

Speaker 2 2:15

That is more realistic , yes , but if you don't have a lender that's not prepared to have these conversations up front , first and foremost , it makes it even more difficult to hear it from your agent when you start shopping Right , because you're going to hear it .

Speaker 2 2:31

When you're in that house that you love , when you're in the element and you've been looking yes , and you've been looking on Zillow hours upon hours upon hours , at a certain price point and you are , you know , slimming down exactly what it is that you're looking for and to find out . Okay , no , this is not reality .

Speaker 1 2:46

This is not going to work .

Speaker 2 2:47

This is yeah , and I think you know not only is the lender and the pre-approval process super , super important before a first-time home buyer goes out shopping . I said the wrong words before that . I didn't mean to say not , not only , but the alternative to that , to not having a pre-approval , to not have talked to a lender , is even more devastating . Yes , you , you start looking at houses and sometimes an agent will spend days , weeks , you know , with with a buyer that's shopping around at a certain price point , because they know that's what , what they're going to be working with , right , um , it's a complete waste of time , it is and it's heartbreaking .

Speaker 1 3:34

And I think too , as we grow in the industry and we gain more experience as realtors , we have seen that devastation in our earlier years because we were taking out buyers who may not have been pre-approved right away , or a friend of ours who's like we want to go see some houses and if we find something then we might buy and , but then when you see 10 houses , they love one . Try to get pre-approved and they can't ?

Speaker 2 4:00

it's devastating all around .

Speaker 1 4:02

And I think , as we have grown , we won't do that anymore .

Speaker 2 4:06

Well , and especially now , because now , with everything that has changed and the buyer agency thing , you know agents are not going to get into a situation with a first time home buyer and not have a pre-approval Because , honestly , at this point you have to agree to a buyer and a buyer agent contract before you start shopping for houses , so you really need to know your numbers , you need to know where you can afford what you can afford and where you need to be and where you need to be .

Speaker 2 4:50

That's definitely one thing that I probably did not make such a big deal about in previous years with first-time homebuyers .

Speaker 1 4:52

But now it's super important Because you wanted to build that , you do . You wanted to meet , you want to build that rapport . Yes , you want to have a good relationship with that buyer , get to know them a little bit . Yep , so we would go out and show some houses , but yes , today is definitely a different environment .

Speaker 2 5:06

Yeah .

Speaker 1 5:07

A different climate .

Speaker 2 5:09

Yes , out there For sure For many reasons . Yes .

Speaker 1 5:12

Not just fire agency , it's you know .

Speaker 2 5:14

It's just added another , you know another kink to the process , Another line to the ethic .

Speaker 1 5:22

It's just another line item , but I think having a great agent to go through that process with you to go through the numbers with you . I think you do a great job of that for buyers and sellers . I like the estimates you give them , like hey , if this is the house you love , here's what you're looking at . Insurance quotes , taxes we try to get it down as best as possible .

Speaker 2 5:43

Yep , yep .

Speaker 1 5:45

Yeah , and you do a great job at that . Well , thank you All the time and .

Speaker 2 5:49

I think most first-time buyers , first-time homebuyers , don't always know options for lending . So I think it's super beneficial , not only for you know an agent to . They can certainly give you some helpful resources on that agent to . They can certainly give you some some helpful resources on that . They can um give you references to , to certain lenders . But there's a lot of a lot of things out there and you know , sometimes they'll go to you know a local bank or a credit union and they we hear that a lot and and it's it's this , this is all you got , this is what we can give you and while you may be okay with it , agents can can help you with that .

Speaker 2 6:30

There are other lenders out there that offer usda loans . You know federally backed and and um governed loans , um there's rd loans . I mean there's all kinds of programs out there where they can offer closing cost assistance , down payment assistance . I mean there are , while you may be fine and you may qualify for a straight-up conventional loan with 10% down at six point , eight , seven , five you , there could be other options out there well , fha .

Speaker 1 7:00

I had a couple of sales last year . My clients were absolutely gonna do twenty percent down conventional loan . Well , when they talked to the lenders and they said hey look , I know you want to do it this way , but you go FHA , mm-hmm , you only need to put this down . Your note is gonna be better than that conventional loan . The interest rate was different . The PM , like all , of it . Yeah , wow , yeah but not everyone is gonna go through that entire process with a buyer they're just gonna .

Speaker 1 7:30

I mean , I hate to say that and maybe and maybe I'm wrong , maybe all lenders are really looking for these options , but I would have to say that some of them are just oh , you're you want to do conventional 20% down ? Okay , sure , I'll run that loan for you .

Speaker 2 7:42

I'm actually working with the first home buyer right , and they were approved with their local bank and I'm not going to get into names , but it was a conventional 10% down 6.875% interest rate , 30-year fixed rate . However and this happens a lot for first-time homebuyers their monthly note is what is most important . Yes , because when you're a first-time homebuyer , you're starting off your career , you're living paycheck to paycheck . It's not like you have hundreds of thousands of dollars saved , so their monthly note is super important . So you know , we , we start , we I've got their pre-approval .

Speaker 1 8:24

I know getting into a house is super important . Oh yeah , because when you already have a house and you don't have to buy , you may not be quick to jump into these higher interest rates or insurance rates . Right and I'm sorry , I didn't mean to cut you off but just saying that they want a house and their note is the bottom line .

Speaker 2 8:40

So their note is the bottom line Well , you know , know , so we start shopping for houses in a specific price point based on their pre-approval . But when I showed her an estimate and a breakdown of what that looked like , with her escrows and taxes , she was blown away . Blown away in her mind . She legitimately thought that she was going to be in the $1,500 price point and she was nowhere . She was four to $500 off per month , per month .

Speaker 2 9:12

So then I step in and say , okay , here are some different things that we could do . We can , you know , we can see if your lender will offer , you know , buy down programs and we can see if you know you can down payment wasn't , it isn't an issue for her , so that part was fine . But you know assumable mortgages . You know there's other things , other options , and they're yes , but they just , you know , first-time home buyers are , so they're green and so it's super . I in , in my opinion , it's super important to have a really good agent that can open up all opportunities and not just be a quick contract and a sale .

Speaker 1 9:56

And a sale , yes , and sometimes . They're learning , they're the whole process Right , correct , and sometimes that looks like maybe now is not the right time .

Speaker 2 10:04

Yes .

Speaker 1 10:06

I've had that conversation .

Speaker 2 10:07

Absolutely .

Speaker 1 10:08

And I've had a couple of people say , you know , I'll just wait , I'll save up some more money , and I said that's totally fine . You have to be comfortable with that monthly note .

Speaker 2 10:15

Yep .

Speaker 1 10:15

And you have to be comfortable with knowing that some of these prices are going to increase in the coming years too , Yep and just setting them up for success rather than upset defeat .

Speaker 2 10:26

Yeah .

Speaker 1 10:27

You know , three years into their mortgage and they're just drowning .

Speaker 2 10:30

Yeah .

Speaker 1 10:30

I mean , that's just not fair , it's not fun .

Speaker 2 10:33

No , why would ?

Speaker 1 10:33

you want to put anyone ? Through a situation like that .

Speaker 2 10:37

I agree , I met with a new first-time homebuyer last night and sometimes I feel like I give too much information night and sometimes I feel like I give too much information . But after we left and she texted me and she said that she felt so comfortable , she learned so much in that one hour of us being together that and I and I look I'm not tooting my own horn , I'm not , but it makes all the difference in the world to just sit down and talk through it with them . This is not something that they're getting from just everybody . So be that person .

Speaker 1 11:11

Be that person .

Speaker 2 11:12

Be that person to provide that information , for sure .

Speaker 1 11:15

And I think that's where all the online comments oh , why do you need a realtor ? They just open doors . We do not just open doors .

Speaker 2 11:24

No , no , no , no At least we don't and a lot of the agents that we know and are friends with don't Like .

Speaker 1 11:30

we are giving great information . We are helping them through a huge process .

Speaker 2 11:34

A huge process .

Speaker 1 11:35

And making sure they understand it and are comfortable with it yeah . Because If you're just out there opening the door to get through the inspection , to get through the appraisal , to get to the closing table , You're in the wrong business .

Speaker 2 11:45

You're in the wrong business .

Speaker 1 11:46

You're doing a disservice to .

Speaker 2 11:48

Your clients .

Speaker 1 11:49

Your clients , our potential clients .

Speaker 2 11:51

Mm-hmm .

Speaker 1 11:52

Like I can't even fathom why people think that so much about real estate agents , when we do so much more .

Speaker 2 11:59

Yeah .

Speaker 1 12:00

I mean we treat people like family , yeah , so that's frustrating to me .

Speaker 2 12:07

Yeah , I would agree . I would agree , and it's probably top priority for first-time homebuyers , for sure .

Speaker 1 12:13

Yeah , absolutely . I feel like they are the future . They are our children . I mean our kids are getting older , they are the future coming up buying houses , houses , and it's not getting easier .

Speaker 2 12:27

Yeah .

Speaker 1 12:28

It's not getting cheaper , like that note that your client was thinking that she was going to get or have . I mean maybe five years ago , but definitely not in today's market , unfortunately . But there are ways to get that note .

Speaker 2 12:44

Yeah , to a comfortable point , right , I agree , yeah , okay , um , I think there's a lot of honestly . I think we should cut it here . I feel like we , we

Navigating First-Time Home Buying Process

Speaker 2 13:00

do . We're doing first-time home buyers , but I think there's a lot of areas that can be . We're doing first-time homebuyers , but I think there's a lot of areas that can be discussed and elaborated on . Like you know , insurance quotes and inspections and unrealistic photos on the internet , like there are a lot of things that you teach a first-time homebuyer . Yes , so you know , or ?

Speaker 1 13:22

even like do you want to do work or do you not ? Yeah , and sometimes they're like , oh sure , I'll do work , and then you go see that house that's in average to fair condition . They're like oh no , not that much , I meant painting walls .

Speaker 2 13:33

Right .

Speaker 1 13:33

That's where the good questions come in .

Speaker 2 13:35

Like what are you ?

Speaker 1 13:36

actually willing to do yeah , yeah , one of my first buyers I think I've mentioned this on a previous episode is I showed them 40 ish houses of all different conditions in all different areas and you you learn a lot about a buyer in in that process the buyer learns a lot about themselves .

Speaker 2 13:57

This is true . They go through the . Sometimes when you first , when you schedule your first showing , it's like I don't know , I want to , I just want to see this house and you go in there and it's like they like nothing about it .

Speaker 1 14:08

Right , so they learn .

Speaker 2 14:10

So they're learning what they want to see in a house , right , you know ? So it's definitely a process , but I think there are so many things that we can touch on on the first time home buying process . Obviously , the vast part of this is getting with a lender and getting with an agent , first and foremost . Yes , know what it is that you're looking for and if your lender is not providing you all of the details , ask your agent . Yes , they have the ability to to write you estimates that show you they can . They have access to flood premiums . They can can get insurance quotes . They can do what you need them to do to get a dollar amount and see it . Look at it , right . So I think that's for first-time homebuyers .

Speaker 1 14:55

It's a lot of information .

Speaker 2 14:56

Have an agent , have a good lender , know exactly what you're doing before you start shopping .

Speaker 1 15:02

Absolutely Know what you want to spend , know what you're comfortable with , you start shopping . Absolutely Know what you want to spend , know what you're comfortable with . Yes , so all right , that was great stuff , as always , and , like you said , we can touch on this later and get really into some of the other parts of the process . So , that is , I'll just call it part one of first time home buying , first time home buyers and we are the move worthy podcast with myself , jenny lindley and lauren jones and together we have the experience to move you forward .