First-Time Home Buyer

Home Buyer Guide: Purchase Your First Chattanooga Home

When a home buyer is ready to buy his first home in the Greater Chattanooga market, mixed emotions can ensue – enthusiastic yet nervous. During the home buying process, remember to be in close contact with your real estate agent and lender. They will guide you for a smooth, headache-free transition.

Advice from a Local Chattanooga Real Estate Agent

Advice #1 – Build a Relationship with an Agent

There are over 2,000 Chattanooga real estate agents that can aid a home buyer in finding their first dream home. Since there are many agents to choose from, you should interview several of them to determine which one is best suited for your needs.

Chattanooga TN Home Buyer's Guide

Advice #2 – Build a Relationship with a Lender

If you already have a lender you would prefer to work with, then GREAT! Otherwise, your agent will refer you to at least two or three different lenders. First, find a local lender to stay in touch with. (A local Chattanooga lender is recommended but not required.) When you are ready to shop around for a home, you should get loan quotes from several lenders. Lenders will sometimes compete with each other to give you the best loan terms, which will ultimately benefit you financially.

Note: Your credit score will slightly decrease when the first lender runs your credit history. Then, you have a 30-day time period to shop around for mortgage rates with different lenders without your credit score taking a further penalty.

Advice #3 – Ask Your Lender Tough Questions

If you have already saved up money for a down payment and are ready to shop for a home, find out what loan amount you can afford. For example, explore if 20% down is better or worse than 3% down. Always make sure you understand the lender fees.

Determining which loan makes the most financial sense can be difficult so do NOT be afraid to ask these kinds of questions. Your lender understands the fine details of the loan terms and will answer any questions you may have.

What is the difference between conventional, FHA, and VA loans? You can find these answers online, but you should (that’s right!) ask your lender.

Use an online mortgage calculator to get an idea of how much your mortgage payment will be. A mortgage calculator can help answer what the cost is for principal, interest, property taxes, and homeowner’s insurance.

Georgia and Tennessee offer assistance programs for first-time home buyers which will help save you money. Again, ask your lender of the current available programs.

Advice #4 – Credit Scores

If you have not been in touch with a lender yet, then make sure you look at your credit scores. Is there any debt? Depending on the debt, your lender will probably recommend paying it off. However, it may depend on the debt. For instance, if you have student loans and have a healthy income, then you might be fine. Since this varies case-by-case, consult with your lender.

In the United States, there are three credit bureaus – Equifax, Experian, and TransUnion. A lender will normally throw out the home buyer’s lowest and highest credit score and use the middle credit score.

Advice #5 – Buy A House You Can Afford

After your lender pre-approves you for a loan, do not automatically think of shopping at the very top of your price range. Take into account your closing costs and any unforeseen expenses (e.g., car breaking down, home maintenance).

Advice #6 – Open Houses Are Your Friend

Even if you are not ready to purchase a home yet, it is never too early to attend open houses. By going to numerous open houses, it will help you comprehend the local real estate market. Do not hesitate to ask questions to the open house host, such as “When was the house built?,” “How old is the roof?,” and anything else you may want to learn about the house. A lot of these questions will be answered on a property disclosure form so ask to review it.

Open House Home Buyers

Advice #7 – Negotiate

The only time when negotiating may not be a good idea is if a hot listing just went on the market. Say, you and your agent determine the house is valued properly, or possibly undervalued, and you know there are multiple offers on the table. Then, you may decide to make an offer at full price or possibly even above listing price. Let’s take into account the opposite scenario. If the house has been on the market for months and it needs some moderate to major repairs, then you will want to haggle on the price. This is why a really good agent is crucial to saving you lots of money! A good agent will fight to save you every dime because you deserve it.

Advice #8 – Home Inspection

Once you are under contract to purchase a home, your due diligence period will begin. You will want to have a thorough home inspection completed, as well as any other inspections you may want. Be sure you understand the findings of the home inspection. If you do not, then ask the home inspector. If necessary, get a second opinion. After you (the home buyer) pay for the home and the house key is given to you, the previous owner is off the hook.

Advice #9 – Homeowner’s Insurance

Whenever you have a loan on a house, your lender will mandate you to acquire homeowner’s insurance. Look at insurance rates from several companies to determine which one is best for you. Things to consider are “How much is the cost?” and “What is covered?” Generally speaking, the cheaper policies will cover less and the more priced ones will cover more.

Note: Flood damage is not covered by homeowner’s insurance. If you are in a flood zone, a lender may require you to purchase flood insurance.