PROPERTY IS POWER! What to do when you’re a first-time homebuyer

by Anthony Kellum

Thinking of buying your own home? It’s normal to feel a little overwhelmed. After all, it’s the biggest purchase you can make. In an effort to remove some stress from the equation, here are a few tips from the experts.

What to do when you’re a first-time homebuyer:

  1. Get pre-approved.Some real estate agents won’t even work with you until you’ve been pre-approved for a mortgage. This is an important first step in the home-buying process. You don’t want to start house-hunting and fall in love with a home you can’t afford. Plus, there may be problems with your credit that you don’t know about. “Sometimes people are just unaware that they may have a credit card they forgot to cancel and it’s caused a problem on your credit rating,” said Keller Williams realtor Twyonna Adams “I know people making half a million dollars a year but they’ve made some mistakes in their financial past, and it costs them when it comes to getting a mortgage.” Your credit is one of three factors that will be considered before you get approved for a mortgage. The other two are income and your down payment. A down payment of 20 percent is a “rarity” with first-time buyers, according to Hull Funding mortgage broker Thomas Hull. But that’s how much you have to have down if you want to avoid paying mortgage insurance. It’s calculated based on the size of your mortgage and how much money you have down. Of course the bigger the down payment, the smaller your loan (and overall interest charges) will be.
  2. Find a real estate agent.While having a real estate agent is not necessary when buying a home, it is recommended… especially if it’s your first time going through the process. Having someone who is knowledgeable about the market leading you through the process could take a big weight off your shoulders. “Your real estate agent should be your quarterback,” said Twyonna Adams with Keller Williams Realty. “And a good agent will more than likely have a network of individuals such as… inspectors, credit counselors, insurance agents etc. who will be a part of your team.”
  3. Stay mindful of your budget.One of the biggest things you have to consider in this decision is your lifestyle, and what that requires from a cost perspective. You may be able to afford the home, but you’re also going to have to realize that you might be giving up going out for drinks after work or out for dinner and cigars with friends because you’re going to be paying a mortgage payment. Asked yourself: if you lost your job and weren’t working for three months, would you be able to afford your home? Or are you stretching yourself too thin? Just because a bank or mortgage broker approves you for a certain amount, doesn’t mean you have to spend it all. “The worse thing to do, is go into homeownership “house poor” said Thomas Hull.
  4. Don’t make big purchases before getting approved for a mortgage.That may seem fairly obvious, but you’d be surprised I’ve seen it happen time and time again where buyers run out and buy a car or spend a large amount of their savings and then the lender will adjust their loan terms unfavorably or flat out deny them a mortgage. Thomas said “Remember, an approval is contingent upon your current income, credit and savings remaining the same. Do yourself a favor and stop on the spending until after you close on your home.”

I truly believe in the American dream of homeownership. There is amazing power in owning a home. Our suburban neighbors are moving back to Detroit. Investors from around the world are already capitalizing on the potential in Detroit—why should outsiders reap all the benefits?  Property is Power!

Anthony O. Kellum, President of Kellum Capital Group, LLC and Kellum Mortgage, LLC Power by Hull Funding. Anthony can be reached at Please connect with me on Facebook at Anthony O. Kellum is committed to making the American Dream GREAT for everyone. Serving underprivileged families and distressed communities remains my chief focus with the launches of my new “Property is Power” speaking series. NMLS #1267030

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