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Are you seeking to buy your very first home in Bose, ID? If that’s the case, you might feel a little stressed about the process of finding the right home, placing an offer, and getting approved for a home loan to complete the purchase.

The reality is, there’s many things associated with buying a home, which is why Boise home buyers — especially first-timers — should strongly consider working with an experienced real estate agent and licensed loan officer to help guide them through the process.

1. Understand the Process of Purchasing a Home and Getting a Mortgage

Before you start the journey of finding your new home, it is essential as a first time home buyer in Boise to take a few steps beforehand to ensure you commit to something that you can comfortably afford. As such, consider the following helpful tips.

2. Begin Saving For a Down Payment

Allow yourself adequate time to save up money for your down payment. Unless you’re applying for a VA or USDA loan, you’ll need funds for the down payment that will satisfy the purchase contract of the home you’re buying.

The type of mortgage you’re applying for and the sales price will determine the minimum down payment.

An example is an FHA loan where you may need to bring in a minimum 3.5% down payment of the purchase price, or for a conventional loan 5 to 15%. If you want to avoid private mortgage mortgage insurance you’ll need a 20% down payment up to a purchase price of $685,312 to stay within the conforming loan limit of $548,250 in Ada county.

If you don’t mind a jumbo loan with slightly higher rates and no mortgage insurance, then may want to pt for that type of mortgage.

Either way, you’ll need to save tens of thousands of dollars for the down payment.  The sooner you can start, the better off you will be. In addition, there are closing costs you’ll need to pay at closing for your purchase, so make it a point to save up and additional 2-3% for that expense.

Understand that you may also receive money as a gift from a relative for part of the down payment. Find out the details from your loan officer if you are considering this solution because certain loan types have restrictions on how much you can receive.

3. Learn What Your Credit Score Is

If you have no clue about your credit score, ask for a copy of your credit report from each of the three major credit bureaus Experian, Equifax, and TransUnion. One or more bureaus may be reporting a mistake on the report that may be hurting your score.  Take the proper steps to improve your credit score by disputing errors as well as lowering your overall usage ratios for each credit card account. If you do that, your ability to be approved for a mortgage, and at an attractive interest rate,  improves significantly.

4. Learn About Your Mortgage Options

Check out all the available home loan programs to choose which mortgage is best for your needs. Among the favorite programs for Boise first time home buyers is an FHA loan due to its lower credit score and down payment requirements.  If you’re a member of the military at Mountain Home AFB or in the Army or Marine reserves, perhaps a VA loan is better for you.

If you’re buying a home in the best neighborhoods of Boise such as the North End,  the Boise Bench, Northwest Boise, Southeast Boise. or the East End you may need a jumbo mortgage to complete your transaction unless you have all-cash in these highly desirable neighborhoods.

5. See If You Qualify for Down Payment Assistance Programs

You may be eligible for Idaho’s only down payment assistance program through Idaho Housing and Finance Association.  

One of the requirements is the buyer has to contribute a minimum of 0.5% of the sales price of their own funds towards the purchase.  More details can be found at IdahoHousing.com

Compare Mortgage Rates

Before you choose a lender, be sure to do some comparison shopping in terms of the interest rates and fees that are charged. The idea is to get the lowest interest rate possible, which will have a significant impact on how much you end up paying over the life of your loan. But you should also pay attention to all the fees that are charged, which can drive up the cost of your mortgage.

Lenders are required by law to disclose all this info to you before you sign on the dotted line, so you’ll be able to find out exactly how much a mortgage will cost you before you agree to anything.

6. Get Pre-Approved

The very first step for buyers who need financing is to get pre-approved before you begin viewing homes to buy and make an offer. Most experienced realtors require this process anyway to weed out looky-loos and buyers who aren’t serious. Getting approved for a mortgage helps you multiple ways. It is smart do this as it lets you know how much you will be approved for, and that essentially tells you the maximum home price you can afford.

By getting yourself pre-approved it will help the final mortgage approval process move much quicker, since the major part of the documentation that your lender requires is already in your file. The only items left are the residential purchase agreement, a satisfactory appraisal, insurance, and a title report.

7. Use the Expertise of a Local Real Estate Agent

There are a lot of real estate agents in Boise available. However, you also want to hire an agent who is very familiar and has sold and listed homes within the neighborhood you’re looking to buy a home in.

Real estate agents who concentrate in specific communities will be extremely familiar with the streets, residents and nearby businesses. What this means for you is they’ll know very soon about any potential sellers in the near future and homes that match your needs.

Moreover, local real estate agents will be able to negotiate more effectively when they know the neighborhood like their back of their hand.

8. Don’t Omit 2 Crucial Contingencies

There are couple of contingencies that you really want to have within your purchase offer. The most important are the home inspection and financing contingencies.

Home Inspection Contingency

This contingency allows you to hire a professional home inspector within 10-14 days to physically inspect the property. Their duty is to discover any potential problems minor or major with the home and inform you their findings.  Once you are given the details you can decide to ask the seller for a credit so you can make the repairs yourself, accept the problem as is, or cancel from the purchase entirely.

Financing Contingency

Your financing contingency functions similarly. Although the contingency last for 21 days or longer as agreed by you and the seller. If your pre-approval is solid and your job or income has not changed, there’s no reason for you to your status as being approved. The one wildcard is if the home appraisal comes back below the purchase price.

If you’re a first time home buyer in Boise, be sure to team up with a seasoned mortgage broker and real estate agent today to make your first venture in the world of real estate a successful one!