Buying Your First Home: A Beginner’s Guide to the Home Buying Process: Part 2 of 4

A Beginner’s Guide to the Home Buying Process

Part 2 of A 4 Part Series

Part 2: Preparation

Step 1: Pre-Approval

As a beginner looking to buy your first home, there are certain steps you should follow to make the home buying process easier and smoother. The first step is to get pre-approved for a mortgage loan. This will give you a clear idea of your budget and what you can afford in terms of a home, thereby saving you the disappointment of looking at properties that are out of your price range during the home buying process.

To start the pre-approval process, reach out to a few lenders and explore the different loan options they have available. You may qualify for conventional loans, FHA loans, VA loans (if you are in the military), or THDA loans. Different lenders offer different options, so it’s a good idea to shop around and compare.

Once you’re pre-approved, you can determine your purchase price budget and monthly payment budget. Your lender will help you create your purchase price budget and provide you with a good faith estimate that includes additional expenses such as closing costs, which typically range from 3% to 6%, and down payment amount. Your lender will also give you an estimated monthly budget that usually includes an escrow account.

An escrow account is a holding account that the bank uses to pay bills such as your P&I (Principle and Interest payment), PMI (Private Mortgage Insurance, if needed), homeowner’s insurance, and taxes. This helps you budget your money more effectively and ensures that your bills are paid on time.

Having a pre-approval will help you in the home buying process, making you stand out as a serious buyer and strengthen your offer when you submit it. Some homes may even require buyers to be pre-approved before they can view the property.

When meeting with a lender, there are certain documents you will need to provide. While the specific requirements may differ based on individual circumstances, the following list is a good starting point:

  • Proof of identity (usually a driver’s license and social security card)
  • Proof of income (usually the past two years’ tax returns)
  • Asset statements (such as 401k, savings, and investment accounts)
  • Comprehensive list of debts (including credit cards, auto loans, and other loans)
  • Any other financial obligations
  • Last two months’ pay stubs

If you are an independent contractor, entrepreneur, business owner, or have recently made a career change, there may be specific programs available to help you. It’s always best to reach out to your preferred lender to ensure that you bring the correct paperwork. It’s a good idea to contact a lender as soon as you start thinking about buying a home. There are many programs available to help first-time buyers with down payment assistance or those with lower credit scores. Even if you are not approved initially, lenders can often help you put together a plan to be ready in the future.

Many lenders have a pre-approval form available on their website, so you don’t even have to meet with them in person to get started. However, it’s important to make sure that you are working with a trusted and licensed officer. Here are links to three of our trusted lenders:

It’s important to keep in mind that all of this is dependent on your financial situation staying the same until the day of closing when there will be a final credit pull. By following these steps, you can make the home buying process less overwhelming and more manageable.

Step 2: Hire a Realtor®

After determining your budget, the next step is to find a professional who can assist you with your home search and the home buying process. There are several ways to do this:

  1. Reach out to your sphere of influence: Speak with people you know and ask if they can recommend a reliable real estate agent, such as Jay Hudson Homes of Keller Williams Realty.
  2. Visit a real estate listing site: Since you already know your budget, you can start browsing homes on sites like When you find a property you’re interested in, request more information.
  3. Research online: Use Google to check out reviews of local real estate agents. This can help you identify any pros or cons that people commonly associate with particular agents.
  4. Respond to advertising: If you see a sign, commercial, or piece of mail advertising a particular agent, this can be a good opportunity to reach out and set up an interview.

It’s always a good idea to talk to at least two or three real estate agents to find one whose personality and experience are a good match to guide you through the home buying process. During the interview process, consider asking the following questions:

Photo of couple speaking with an agent about hiring.  Step 3  of the Home Buying Process
  • How long have you been in real estate?
  • Are you a full-time resident of the area?
  • Are you licensed in both Tennessee and Georgia?
  • Why did you choose real estate as a career?
  • How many buyers have you helped purchase a home?
  • Are you a full-time or part-time agent?
  • How many clients are you currently working with?
  • Will i be working directly you (the agent), or with a team?
  • Can you provide some references I can contact?

Before making a final decision, be sure to look at the agent’s website, Google page, and social media accounts to see what people are saying about them. Take note of their involvement in the community and their marketing strategies.

Working with a Realtor® is an excellent decision in the home buying process, particularly for first-time buyers. Buyers typically do not pay the agent’s commission; this is paid by the seller. Realtors® are licensed professionals who must maintain their education and adhere to ethical and professional standards. They also have an extensive network to help match you with the perfect home for your budget and can negotiate the best offer for you based on their knowledge of the local real estate market.

Finally, your agent will guide you through the entire home buying process, from deciphering paperwork to reviewing seller disclosures and answering any questions you may have. With the help of a skilled and experienced Realtor®, you’ll be well on your way to finding your dream home.

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