The Ultimate Step-by-Step Guide to Buying Your First Home

Patriot Nation, you've asked and now I've answered. In this video, I'm going to go down a very important road for you, a very detailed stepby-step approach to buying a home for the first time, the entire process, because a lot of you have told me, "Hey, this is so stressful for me. It's too complex. There's too many variables going on here." I'm going to solve all that for you. So, just be at peace. You're going to feel empowered. You're going to feel confident. I'm going to take you from knowing how much you can buy all the way through the very beginning all the way through the process where you finally get those keys at closing and you open that door for the first time and you walk into your first new home. So, it's all exciting and it's going to make sense. I hope you can share this video. Watch it all the way through because I'm going to show you access to an ebook that I put together that's going to go over everything I've talked about here, maybe a little bit more detail and again provide a great way for you to own your first home. And as always, let's kick off this rodeo right now. Hi folks, I'm Kevin Fagan. I'm the mortgage patriot on your side, nestled here in the Hill Country above San Antonio, Texas. So all you proud Texans and all you great folks all around the country. And as always, another great video. And normally I do one topic videos meaning I do in one subject you know best down payment program in the country or how to get the lowest interest rate possible or how to use renovation loans to expand your you know home buying options those kinds of things and those are all important absolutely but today more of a 20,000 you know view from above the actual process from start to finish taking you from if you can even buy a home and if you if so how much can you afford all the way through the end where you finally get those keys at closing and you walk into that beautiful new home of yours. So, as always, hit the like and subscribe if you would. This really helps me with all the YouTube algorithms. It brings my my videos to the forefront and really would appreciate subscribing. I need to hit 8,000. We're at about 7,000 something. So, uh let's get into all that content right now. So, here is the flow of this video. We're going to cover six main aspects of the journey of buying a home. And just like planning a big trip across America, for example, visiting lots of cities, you don't just willy-nilly just start heading out, right? You have a plan. So the plan here is going to be number one, we're going to assess your financial foundation. Starts with the numbers, starts with your income, starts with your credit scores, all that kind of stuff. Secondly, we're going to talk about pre-approval process. How much do you qualify for and so forth. Thirdly, the house hunting aspect of you engage an agent looking for actual homes. Fourthly, we're going to be talking about once you do put an offer in, what can you expect during that offer and negotiation period. Fifthly, we're going to talk about once you do get under contract, what can you expect during the under contract period? And last, we're going to look at the closing period and what that looks like closing and slightly beyond. So, that'll take you from start to finish. And let's get into all that content once again right now. So, let's get into the details of these six topics. And the first is financial foundation. So, what are we talking about here? We're talking about just trying to make sure that your base, your f, you know, all your finances are in order. It's just that simple. So, engage a professional like myself. We're going to look at the quality of your earnings. We're going to look at your debt load. We're going to, yes, we're going to do a soft pull on your credit to see if there's any collections or any old charge offs that might affect, you know, this or that. We're looking at your level of savings, for example, and we're going to figure out just where you stand. So, let's take some examples. Different loans are based on your financial strength and your debt to income ratios. What is a debt to income ratio? Well, let's say if you hypothetically have a household income of $8,000 per month and you have $4,000 of total debt including your current rent payment, that's a 50% debt to income ratio. Certain loans allow for 50% or and no higher. And whereas an FHA, for example, allows for a little bit more debt. That's for a different topic. But the point is here that you want to engage someone like myself or some well-meaning, well-intentioned loan officer that's going to help you uh comb over your financial situation and see the quality of the earnings. So, you're a single mother, for example, you've been out of the workforce for a couple of years and now you're starting a new job where you're getting paid well. Let's say you're getting paid $100,000, but it's a W2 hourly wage. Unfortunately, you need two years of hourly wa of hourly wage to average or else they just can't count anything. Whereas, if you're a salaried individual, you get credit right away. So, in other words, two people making the same amount of money, one is salary, one is is hourly wage are looked at totally different. So, look at these two videos right here. I have what you should not do, the five things you should not do before you buy a home and the five things you should do before you buy a home. And then we'll talk about the second topic. Now just going back a little bit to that first topic. When do you want to start all this? If you are in a lease for example and you're within s 6 months of that lease coming due, you absolutely absolutely you need to start now. I would start even as much as 9 months out. Why? Because when you run the the softpool review for the credit and if there's any errors or there's any collection items or so forth that we need to work on, it takes months to to get these off your off your scores, off your report. So, you've got to start early. And the other thing would be, you know, a lot of people lack savings. That's one of the main things people lack. They might make enough money, their scores might be fine, but they only have, say, $300 or $4,000. But they can save maybe $500 a month or more, $800 a month, you know, for the next 6 to9 months. And and a good loan officer like myself will be able to tell you how much to allocate per month in savings to get you to that ideal nest egg, if you will, of when you approach the time to be buying. Very much related to the first step is the second step of the pre-approval process. You're going to get what's called ultimately a pre-approval letter. What exactly is that? Well, we're asking for certain documentation because now we need to get serious and say, "Okay, you've told me you make this much money, but now we need to see it." So, we're going to be asking for your ID, your most recent payubs, your most recent bank statement, and your most recent W2s, all to show you financial strength and proof that you actually do these things. But once I receive these documents, I run them through the automated system and that puts out to us a recommendation by Freddy May or Fanny Mack. It says, "Yes, you are indeed pre-approved up to this certain amount and now you can go house hunting." So great, we have to get to that eligible approved designation or else you have no preapproval letter. So in other words, I can't just willy-nilly create a pre-approval letter for you that will mean anything. So that's the preapproval process. It's based on that financial foundation that we talked about at the beginning. Let's go on to topic number three. One last thing on those first two steps is you're going to want to know two things before you start shopping for a home. Let's say, for example, you can afford a $300,000 house. I'm going to show you or hopefully the loan officer you're working with is going to show you two main things. One is what is the estimated payment going to look like, including everything, principal, interest, property taxes, property insurance, HOA dues, the whole ball of wax. We want to know what that monthly check is going to look like that I'm going to be sending out on my new home. Got to know that number. The second number you have to know is roughly what is the estimated cash to close. What's that check going to look like that I'm going to write at closing? Heck, if I only have $15,000 or $12,000. Is it going to cost me $20,000? I can't do it. You're going to find that out after the fact. No, you have to know both those sets of numbers right away. And I can help you with that. So, the third step is engaging now a realtor because you're going to give them the pre-approval letter that I would be extending to you and you're going to show your realtor that you are a candidate that can handle an x amount of dollars worth of home. And so, you want to obviously pick an experienced realtor. You know, I would advise against somebody that's kind of new in the industry, even if they're a good friend. It's this is too big an issue, too big a transaction uh to put it on somebody that hasn't doesn't really know the ropes very well. Because in step four, we're talking about offers and and negotiation. That's where an experienced realtor can shine. And I've been a realtor since 2007 and a loan officer since 2003. So, tons of experience. But again, now these days, you're just going to go on the internet and look around uh and kind of call down, filter down the number of homes that you want based on certain criteria. And then you're going to give that list to an agent and you're going to go out and view the homes. Again, another quality that you're going to want in an experienced realtor is what do they look at? uh if things need to be renovated because there's going to be lots of things sometimes that a lender compels the seller or you to fix before you buy the home. That's a separate topic altogether and you can look at this video right here where it talks about negotiations. We'll get into that right now. So, let's go on to that fourth topic. So, you previously got your finances in order, which helped you generate that pre-approval letter, which you've extended to your agent, and now you have identified a home, and then you viewed it, and you're excited, and this is the fun part, but it's also the part that causes a lot of emotional, you know, turmoil, and it's the offer period. And what is that? Well, that's you're actually creating the contract. You're filling in an actual purchase offer contract, and presenting your offer. You're leaning heavily on your agent here. And that's where the agents can really shine. That's why you need an experienced one. They're going to be looking at what we call, you know, comparables or comps. Down the street, there was a similar floor plan with, you know, a couple hundred square feet more maybe that sold for 295. So, what is this one worth? Well, there's one another house down the on the other side of the street that's a little bit smaller than yours, the one that you like, and it sold for 275. And so, you know, you put these comps together and you start making offers, not just based on the price, but also the things that you need at closing to help you uh, for example, minimize your closing costs. And those are things like seller concessions or who's going to pay certain items like the seller, are they going to pay for title insurance, are they going to pay for the survey, so forth. So all that needs to be negotiated in the contract and it's not simple. So again, got to have somebody with experience like myself or anybody that I can have teammates that can in my in your area that that can help, but we're all schooled in negotiating, you know, the the best deal for you and and driving, especially if it's needed, your cash to close as small as possible. So again, look at this video right here. It's very good. It's how to negotiate the price of a home in 2025. It deserves, you know, its own topic for sure. And then let's get into the topic of once you get under contract. What can you expect? Great, congratulations. You're under contract. Everybody's agreed to the offer. Buyers and sellers have all signed e signatures and you're now formally under contract. So what do you do? So the first thing you're going to do with the help of your agent typically is you deliver the signed purchase contract to the to a title company. This is signed by someone either a selling party or your agent, but it'll be defined inside your purchase contract where that title is going to be held. Okay? You're taking usually about 1% in the form of a check to a title company as earnest money deposit. Does that mean you're going to lose that money if you back out? No, it does not. So, in the case of purchasing say a $300,000 house, you're putting up a $3,000 earnest money check and you have initially what's called an option period. In the contract that got that everybody signed, it has a number of days that you have for the option. It could be a seven to 10 day typically period where you're inspecting the property. So that's one of the first things you will do is with the help of an agent once again is is you're going to assign a inspector to go out and visit the property as soon as possible. First, second, third day at the most. Okay? And they're going to generate a very detailed report about all the working systems of the home. And trust me, every single report that you get will scare the heck out of you. It's going to make you want to walk away. So, you got to know upfront, an experienced agent like myself will be able to guide you through this, but you're going to things are always going to be wrong at the house. And a lot of times, that's okay. But the lender will re compel somebody to fix these things before closing. So, that's where you get into some issues. And so you have during the remaining aspect of your option period, let's say it's 10 days to negotiate, renegotiate, and further negotiate with the selling party of what needs to be fixed per the lender guidelines, per the underwriters. So you're not out of the woods yet. Just because you're under contract doesn't mean this deal is going to close. So that's the agent side of it. There's also the other track on the loan side that we'll talk about. While all this is taking place, now you're also doing the loan side track and that's pretty complicated as well. So, you're going to be helped by the benefit of the loan officer like myself or and or a processor that's associated with the loan officer and they're going to be reaching out to you, introducing themselves and asking for further documentation. While that's going on, they're going to be suggesting that you engage with an insurance agent, someone that can provide hazard or property insurance for your home. So, you'll be doing that upfront. One of the first things you're going to be paying for outside of closing, meaning upfront, is the appraisal. Once uh you start the loan, you're going to be sent documentation uh is called initial disclosures. And that basically alerts the mortgage community that you have the intent to move forward. And that starts the appraisal process, which you'll pay for upfront. That starts other things like ordering surveys and so forth like that. So again, you're going to be working along with the with the loan officer and the processor in providing doc more documentation all along the way because we're trying to take it from a pre-approval, which was an automated system to a a human approval, an underwriter decision to say, you're good. You're cleared to close. So hopefully within a couple of weeks to 3 weeks after the appraisal has come back and everybody's and all the other documents are in, you get what's called a clear to close, meaning everything is done. And this is presumes, of course, on the other track, the real estate side, that you've already worked through all the issues during your option period of maybe fixing things and having renegotiated the price or renegotiated what have you. So, at the very end, you're going to get what's called a clear to close. Like I said, that's going to generate a closing disclosure, a CD, closing disclosure. What is that? It's going to show you all the final numbers. And now we're going to see exactly, not estimated, but exactly what that monthly payment is going to be, including all the aspects of all the different payments that go into a mortgage. And you're going to show what that cash to close is, what's that actual check you're going to write at closing. And the lender and the title company at that point are going to get together and they're going to uh balance and rebalance all the numbers, make sure that's correct, and then you're going to be good to go. You're going to get assigned a schedule uh to close. It could be sometimes an e e-signing, but most times still it's physical closing at a at a title company somewhere along the line depending on how complicated your move will be and when you want to move because you don't have to move day one. In fact, I we have neighbors next door that's bought the house next to me literally and they haven't moved in yet. It's been 3 months. So, I don't know what's going on there. They're fixing certain things. But anyway, let's assume that you want to move in that that next weekend. Uh you want to start planning obviously for that move. That's the other thing that you need. it's a big deal on your part is to engage a moving company or moving, you know, teams of movers. So, that needs to be done at least two or three weeks ahead of time. So, once you start that loan process, you're probably going to want to engage not only the insurance agent, but also a moving uh company. So, that takes you most all the way through. Let me give you some final talk here. Now is the best time to talk about the ebook that I promised you. It's complimentary. Check it out, please. You're going to want it. Trust me. Put down the comment section. Just write the word road map or please send me the road map, what have you. just put that in the comment section. Now, it's going to take me commenting back to you on YouTube for further information, but I'll that'll let me know to send you the email uh that ebook. It's very inclusive, covers everything I talked about today, but in more detail, but it's going to give you a nice step-by-step guideline, and it's going to put you again in in a good peace of mind and and ready and confident to go purchase a home. So, in terms of expectations of timeline, again, it's going to take two to maybe six to even nine months, depending on how complicated your situation is, to prepare you for home ownership. And once we do, and we do get an offer in for you, uh that uh usually takes about 30 days. In other words, if you get under contract at the beginning of the month, you can close and be cleared to close and move in by the end of the month. I can normally do a deal in about 3 weeks, but the entire thing could takes about four to a little bit longer than that. So, I hope all this is a major help to you. Send offer the ebook. Write the word in the comment section. Roadmap. I'll send that to you. And I hope this is a great help to you. I'm Kev Fagan, the mortgage patriot. Make it a great one. END OF TRANSCRIPT