Buying Your First Home or New to the Real Estate Market? 5 Tips from New Door Property CEO Alex Lopez

Posted On Wednesday, 04 May 2022 01:19

Buying a home isn't like buying a new pair of shoes. There is a lot that goes into it and much to understand in addition to finding your dream home. From fees to lending opportunities to optional assistance programs, explore the wonderful world (sometimes overwhelming) of real estate along with us and our special guest, CEO of New Door Property Transfer, Alex Lopez. With his expertise, you will become a master of this new world in no time.

Real estate agents are great resources if you leave here with more questions. Our goal is to get your mind flowing so that you know what to ask while you search for your new home and provide practical steps from Lopez for making the buying process run smoothly.

Examine Your Financial Circumstances

"Knowing your budget is crucial before you start exploring the home market," Lopez explained. "You don't often walk into a Gucci store when you're on a Nordstrom budget, do you? The same goes for home buying. The best way to avoid torturing yourself is to know your finances and avoid the homes outside your range."

Lopez recommends using pricing filters when exploring online real estate websites such as Zillow. It can be fun to look and dream, but it can be dangerous too.

"You don't want to get into a situation where you're paying much higher mortgage payments than you can afford. Once that sheen wears off, the resentment towards your home sets in, buyer's remorse sets in, and your purchase will fill you with regret," Lopez warned.

Plus, there's more to it than that. Buying a home costs more than your monthly payments. There is the down payment to consider and how you will qualify for that mortgage in the first place. Gather together your past tax returns, work history, paystubs, credit score, and debt-to-income ratio. The lender (bank, credit union, or mortgage broker) will need all of that information to determine whether you are eligible for a home loan.

Manage Your Credit

"Be mindful of controlling your credit positioning," Lopez said. "Don't pile loans on one another. If you pay other 'non-essential' luxury bills, like a sports car over an affordable one, Starbucks coffee daily, stacking a home on top of all that can be so dangerous for your bank account and credit score --- not to mention your stress levels."

Mental health aside, bad credit ruins your chances of securing a loan. So tighten that area up if you've lost control in any way — and start right away whether you're in the homebuying market or not.

You might find that your credit needs some time to heal while you work to build it back up again. Use this time to work on your savings as well because down payments on homes usually start around five figures. This number depends on the home's price and the lender's evaluation of your credit score.

Your savings account will be funding more than just that down payment, including potential home inspection, closing, and moving costs.

Lenders and Loans: Take Your Time

Lenders are businesses, and to reel customers in, they use perks and differing requirements to try to differentiate themselves from their competitors. Use this to your advantage and compare your options. If one potential lender says no, there are many others to whom to take your business.

"Whether you know any lender will say yes or you are concerned with your current financial standings, it's best to take some time to at least browse your options," said Lopez.

Types of Mortgage Loans

Lopez explained further that there are diverse mortgage loans to consider based on your monetary circumstances. He recommends finding a mortgage loan that works with your credit record and what you can afford for an extended time.

For the first-time homebuyer, this is a vital hint. Some to investigate include conventional, FHA, VA, and USDA loans. These various loan types are available to people with different credit scores, so it's essential to know which is which.

Conventional loans allow down payments on homes, as low as three percent in some cases. However, most of the time, customers must have a 650 or higher credit score.

If your credit score is your main obstacle to home buying, an FHA loan might be your best bet, with credit scores accepted for this type of loan as low as 580.

Are you a veteran? A VA loan might be the one for you. The best part is that they can be as low as zero percent down payments.

Finally, USDA loans offer zero percent down payments, and lenders calculate your payment requirement from your household income rather than your credit score.

Grants and Assistance

If you are still worried about that credit score, there are many first-time homebuyer service programs into which you'll want to look. Many supply donations (officially called grants) to support down payments or closing costs.

Others make homeownership more comfortable with less stringent requirements based on detailed household monetary eligibility matters.

"There are so many great resources available to prospective homebuyers that they don't know about," said Lopez. "It's always no if you don't ask, but you have to know the right questions."

To qualify, the government will look into whether you've ever owned a home (if the answer is no, you are one step closer to getting help.) It will also consider you more highly for assistance if you are a single parent or supplanted homemaker (divorcé) that exclusively owned property with an ex-husband or wife.

Do you live in a mobile home or RV? You're in luck because the government favors helping those with no physically permanent address.

Finally, if you have a restaurant, office, or business where you own the brick and mortar building in which it's in, but the living or working environment is unbearable because the property itself isn't up to code, the government will consider helping you buy your first home.

"Like all of these tips, just do your homework and you might find the perfect fit," said Lopez.

Additional Fees

Remember when we mentioned additional costs and fees? Here is the breakdown:

There will be expenses beyond the price of your new home.

Closing costs --- which usually consist of lawyer fees, inspection fees, appraisal fees, escrow fees, and title insurance --- are due at closing. These payments could be thousands of dollars you're not able to spend if you're not mindful.

You can speak with your lender about help with these costs, but you should give it your best effort to prepare your finances to cover them before you officially get the keys to a new home.

Keep these suggestions in mind if you're a first-time homebuyer preparing to tackle your homeownership journey. 

About New Door Property Transfer

New Door Property empowers real estate teams to take control of their closing process through turn-key, transparent title partnerships. The company was founded in 2019 by CEO Alex Lopez, Founder of For more information, visit 

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