The Ultimate First-Time Homebuyer's Guide

If you are thinking about buying your first home, you may feel a bit nervous and excited about the prospects. This guide covers everything you need to know about buying a home as a first-time homebuyer.

The first thing to know is that Imagination Homes is here to help make your homebuying adventure easy and enjoyable. In this article, we’ll cover a lot of ground. That may make the process appear difficult, but it doesn’t need to be. Once you’re ready to begin, we’re happy to help you every step of the way!

Remember to give yourself plenty of time, room to breathe, the occasional opportunity to brag and permission to have fun. You’re only a first-time homebuyer once, so it should be a time to remember fondly.

Hot Tip: Always use copies of any of your documents and keep the originals in a safe place.

In this guide, we'll answer your questions: How do you check and improve your credit score? How do you apply for your first mortgage? How long does buying a home take? And more.

The answers below will help you better prepare to buy a home. At Imagination Homes, we will be by your side every step of the way as we help you reach your dream of homeownership.

Here is the checklist of the things you need to do:

1. Assess your financial situation.
2. Maximize your credit score.
3. Secure financing.
4. Conduct a final walkthrough.
5. Set up an escrow.
6. Close on your new home.

Many people find that improving their credit score, securing a home loan, and navigating the escrow process are critical steps when buying a home. Let’s explore these topics in more detail to help you prepare for a successful purchase.

Credit Score and Credit Reports

Buying a home is a major milestone and, for many, the most significant investment they’ll make in their lifetime. Qualifying for a mortgage starts with presenting a strong credit score, which not only increases your chances of approval but may also help you secure a better interest rate.

Lenders evaluate several factors when deciding whether to approve a home loan (also called a mortgage), including your credit score, employment, income, and down payment (if required). Your credit score is typically based on either the FICO® score or the VantageScore® system.

The three major credit bureaus — Equifax, TransUnion and Experian — compile credit reports, which usually contain similar information. However, errors can occur. By law, you’re entitled to one free credit report per year from each bureau, allowing you to review your reports for accuracy and address any discrepancies.

Applying for a Home Loan

While deciding on your new house, you can work with the kind staff of Imagination Homes to determine the total cost of your new home. The lender will use this total figure when you apply for a home loan and to calculate any down payment requirements (if any).

Shop for a Lender Wisely

When looking for a lender, take the time to research programs designed for first-time homebuyers. Ask about credit score requirements and down payment options to determine if you’re likely to qualify before proceeding further.

Many lenders can provide prequalification based on the information you share without pulling your credit report. However, a formal qualification will eventually require a credit check.

Access Help from Federal Programs

Start with the federal government programs and then compare the loan possibilities with other lenders. See if you can find any down payment assistance programs that might help.

Here are some examples of helpful government programs:

• Government-backed home loans and mortgage assistance programs
• Homeownership vouchers for first-time home buyers with low incomes
• Special programs for veterans do not require a down payment

The steps are: 1) Choosing a move-in ready home, 2) getting the financing lined up, and 3) "closing" the sale through a legal process called "escrow." Are you getting excited? Keep going. You are almost there.

Navigating Escrow and Unlocking the Door to Your New Home

You fell in love with one of our move-in-ready Imagination Homes. Good choice. You're on your way to starting a new chapter in your life by becoming a homeowner.

Congratulations! You are well on your way to becoming a homeowner. Pat yourself on the back and be prepared to go through escrow, which can last 45 to 90 days.

What to Expect During the Escrow Process

Escrow involves completing the paperwork to finalize your mortgage, transferring down payment funds and registering the deed in your name with the county recorder. The title officer will also set up accounts for property taxes and mortgage insurance (if required), ensuring these are included in your monthly payment and sent to the appropriate parties.

Typically, a title company manages the escrow process.

Closing Day: The Final Steps to Homeownership

Closing day is when all your hard work and preparation finally come together. The escrow officer will prepare the necessary documents, and you’ll attend an appointment to review and sign everything required to complete the purchase. You’ll also receive copies of all the paperwork for your records.

Don't worry about the stack of paperwork—it’s a big step, but you’re almost at the finish line.

Once you’ve signed all the documents and had your signatures verified by a notary (don’t forget to bring a valid ID for the notary), the title company will take care of the final steps. They’ll record the deed with the county, transfer the funds from the lender (and your down payment, if applicable) to the seller and officially close the title.

And then comes the best part—when you get the call that the title has closed, you get the keys to your very own new home!

More Around the Corner From Imagination Homes

Imagination Homes is selecting top-quality materials, curating designs and color palettes, and preparing to build your new home. We can’t wait to welcome you home!