Buy Your First Home

in Wilmington, NC

Thinking about buying your first home on North Carolina's pristine coast? First of all, congrats—homeownership is a huge milestone! However, you may be feeling a little overwhelmed or unsure of where to start. My first-time buyer guide is here to help you navigate the ins and outs of the buying process. And if you ever have any questions, I'm just a phone call away!

Part 1: Understanding Your Mortgage

Before you even think about touring homes, you'll need to get your finances in order and shop around for a mortgage. Thankfully, mortgages aren't a "one size fits all" kind of loan—there are hundreds of options available to you!

Types of Mortgages

Here are just a few of the most common loan options available to Wilmington buyers.

Conventional

These popular loans come with a term of 15 or 30 years, a fixed or adjustable rate, and a 20% down payment. To qualify for a conventional loan, you'll need excellent credit and an established financial history. 

VA Loan

This type of loan is sponsored by the Department of Veterans Affairs. To qualify for a VA loan, you'll need to be an active, retired, or veteran member of the armed forces. These loans offer low down payment options with no mortgage insurance, but they're only available for primary residences and can require a funding fee.

Government Loans

The federal government sponsors many different kinds of mortgages (like FHA and USDA loans) targeted towards first-time and/or lower income buyers. The state of North Carolina also offers down payment assistance and first-time buyer loans through the NC Housing Finance Agency.

What Do Mortgages Include?

Your mortgage payment is divided into four parts, often abbreviated as "PITI." Let's take a closer look at what you'll be paying each month.

Principal

This portion of the loan is the actual repayment of what you borrowed from your lender.

Interest

This is the price you pay for borrowing money, which is expressed as a percentage. Most lenders will make you pay off interest before the principal.

Taxes

Property taxes are calculated on a yearly basis, but they can also be lumped into your monthly mortgage payment.

Insurance

Your mortgage payment may also include homeowner's insurance or private mortgage insurance.

Going Loan Shopping & Getting Prequalified

Now that you know about the most common types of loans, it's time to go shopping! Here are some tips to help you out as you continue to gather information. 

Ask for referrals

Consider asking your agent or even your loved ones for mortgage recommendations. You may also want to consult a mortgage broker—for a fee, they'll shop around to find you a loan that's tailored to your unique needs. 

Start calling

Even if you haven't applied for prequalification or preapproval, you can still contact a lender to learn more about their current programs. They'll be happy to talk to you about interest rates, types of loans, and any incentives they may have for first-time buyers.

Get prequalified

If you want to know where you stand with a lender without authorizing a hard credit inquiry, getting prequalified is the way to go. You'll need to provide a lender with some basic financial information, and they'll let you know if and how much you've been approved for. If you get denied, there's no impact on your credit!

Get preapproved

Preapproval is one of the most important steps a buyer can take before looking at homes. While similar to prequalification, preapproval is a a better indication of whether or not you can take out a loan. To get preapproved, a lender will complete a hard credit inquiry and then send you a letter with more concrete information on possible interest rates and the amount you can borrow. 

Part 2: Shopping for Homes

Now it's time for the fun part—shopping for homes! Before you start spending your days scrolling through the latest listings, you'll want to have a plan of action. These tips can help you start your search off on the right foot.

Find the Right Home in Wilmington

Separate wants & needs

Take some time to write down a list of your wants and needs in a home. You should only look at listings that satisfy most or all of your needs. The right house should also have at least a few of your wants, too.

Be a little choosy

Remember—buying a home is a huge financial decision. If you have certain non-negotiables, make sure your agent knows about them. When you're spending this much money, it's okay to be picky!

Inspect homes closely

As you're touring homes, make notes of everything you see and consider taking photos. You should also look out for red flags—like water damage or uneven floors—if you want to avoid buying a fixer upper.

Part 3: Making an Offer

Once you've settled on the home of your dreams, it's time to put in an offer!

Offer, Negotiate & Sign

The Purchase & Sale

Your offer, also known as a purchase and sale agreement, will contain more than just the amount of money you're willing to pay for a home. You should also attach your preapproval letter, as well as any contingencies (like a home inspection).

Negotiations

After the seller receives your offer, they have a few options: they can accept it, reject it, or counter with different terms. From there, the ball is back in your court. Negotiations can take a while, so be sure to consult your agent and be patient.

The inspection

Once you've settled on the terms of the contract, you'll want to order a home inspection. Even if a home is brand new, it could still have some lingering problems you'll want to know about before moving in. If an inspector uncovers any problems, you can ask the seller to make repairs, offer a credit, or take money off the price of the home. 

Part 4: Closing the Sale

You're almost at the finish line! The closing process can take a few weeks and often involves signing a lot of paperwork. Your agent will be there to help you every step of the way.

The Final Steps

Finalize your loan

During this time, you'll need to be in communication with your lender to finalize the details of your mortgage. This can involve a lot of phone calls and paperwork—and while it may seem a little overbearing, they need to do their due diligence.

Sign & pay

On a pre-determined date, you, your agent, your lawyer, and the seller's team will sit down and complete the final paperwork needed to transfer ownership of the home. Most closings take around an hour and involve a lot of signing, but your agent can guide you through it all.

Get those keys!

You finally made it! After the deed has been recorded, you're entitled to your keys. Now it's time to move in and enjoy the perks of homeownership.

Ready to Buy Your First Home?

If you're eager to take your next steps, just give me a call for more information. As a seasoned real estate professional, I'd be more than happy to help you find your very own place in the Wilmington area.