How To Buy A Home: A Basic Guide to Financial Expectations

Buying a home for the first time is an exciting milestone, but it can also feel overwhelming, especially when it comes to understanding the financial steps involved. Whether you’ve already found the home of your dreams or are still exploring options, knowing what to expect in the home-buying process is key to a smooth and successful journey. At Cothran Homes, we understand the challenges first-time buyers face, and we’re here to help guide you through the steps so you feel prepared and confident.

What Are Some Financial Tips for First-Time Home Buyers?

The financial side of buying a home can be complex, but with the right information, first-time home buyers can make informed decisions. Here are a few tips for first-time home buyers and essential steps to take when planning to buy a home.

1. Determine Your Budget

Before anything else, it's important to have a clear understanding of how much home you can afford. This includes not just the purchase price, but additional costs such as property taxes, homeowner’s insurance, and maintenance. Consider your current debts and income or DTI (debt-to-income) ratio as a starting point. Even if you can afford a large mortgage, experts recommend that your monthly housing expenses (including mortgage payments, taxes, and insurance) should not exceed 28% of your gross monthly income.

2. Get Mortgage Preapproval

Mortgage preapproval is a critical step in how to buy a home. A lender will review your financial information, including your credit score, income, and debt, to determine how much they’re willing to lend you. Preapproval gives you a clearer idea of your budget and shows sellers that you’re a serious buyer. You’ll want to shop multiple lenders and find out what types of loans and rates they offer. This will require a hard credit pull, but as long as you apply within a short amount of time, it will only count as one hard inquiry on your credit. Additionally, this step allows you to lock in an interest rate and helps prevent surprises when it’s time to close on your home.

3. Save for a Down Payment

While some loan programs offer low or no down payment options, most home buyers will need to save at least 3-20% of the home’s purchase price for a down payment. The amount you put down can affect your monthly mortgage payments and interest rate, so it’s wise to save as much as possible to reduce long-term costs. However, there are tons of programs available to first-time buyers, along with incentives offered through your home builder to help with monthly payments. Be sure to work with your lender for the best options.

4. Understand Home Closing Costs

In addition to the down payment, buyers must budget for home closing costs, which can range from 2-5% of the loan amount. These costs typically include things like appraisal fees, title insurance, taxes, and attorney fees. Make sure to review the closing cost estimate provided by your lender early in the process to avoid any last-minute surprises.

5. Explore Loan Options

First-time buyers can access various loan programs designed to make homeownership more affordable. For example, FHA loans offer lower down payment requirements and are ideal for buyers with lower credit scores, while VA loans provide competitive terms for veterans. It’s a good idea to work with your lender to determine which loan product best suits your needs. Here are a few loan types you might consider:

• Conventional - Good with high credit scores and large down payment.
• FHA - Good with lower credit scores and little to no down payment.
• VA - For members of the US military, veterans, and their spouses. No down payment is required.
• Fixed-Rate Mortgage - Charges the same interest rate over the life of the loan.
• Adjustable-Rate Mortgage - Charges an interest rate that can vary over the life of the loan as the market changes.

6. Don’t Forget About Ongoing Costs

Finally, remember that buying a home isn’t a one-time financial commitment. Ongoing expenses such as utilities, homeowner’s association (HOA) fees, and general maintenance should also be factored into your budget. Planning for these recurring costs will help ensure that your new home remains a source of joy, not stress, over time.

Work with One of the Best Home Builders in SC!

Once you’ve tackled the financial basics of how to buy a home, the next step is to choose a trusted builder. Cothran Homes is proud to be one of the premier home builders in SC, offering beautifully designed new homes in Greenville, SC. We’re dedicated to providing top-quality craftsmanship, luxurious features & finishes, plenty of customization options, and no-maintenance townhome exteriors. Our homes are built to fit your unique lifestyle.

At Cothran Homes, our process is centered on you. From the initial consultation to the final walk-through, we work closely with you to ensure every detail meets your expectations. Our in-house Design Center allows you to personalize your home with a wide range of options, from flooring to countertops, ensuring your new home reflects your taste and style. Once everything is approved, we’ll start obtaining permits, laying the foundation, and building your home from the ground up. If you’ve chosen one of our available homes, you can trust we are just as hands-on in helping you find the perfect home for you. Additionally, our Living IQ features ensure that your home is energy-efficient, smartly designed, and built to the highest standards of quality.

When you build with Cothran Homes, you’ll have the opportunity to visit our Design Studio to choose from an array of high-quality finishes and materials. Whether you prefer modern aesthetics or classic touches, we offer a variety of selections for cabinetry, flooring, fixtures, and more, allowing you to create a home that truly feels like your own. This personalized design process ensures that every aspect of your home matches your vision.

We understand that buying a home is one of the biggest investments you’ll make, which is why we stand by our homes with a comprehensive warranty. Cothran Homes offers a 10-year structural warranty covering load-bearing components, providing peace of mind for the long-term integrity of your home. Additionally, we provide 2 full years of coverage for systems such as electrical, plumbing, and HVAC, and a 1-year warranty for workmanship and materials, ensuring that any defects are addressed promptly. This thorough warranty coverage means you can settle into your new home with complete confidence, knowing that we’re here to support you. Everything has been thought of, so you can move in with peace of mind!

Connect with Cothran Homes Today!

Ready to take the next step toward homeownership? Cothran Homes is here to help! Our team is dedicated to guiding first-time home buyers like you through the entire process, from mortgage preapproval to understanding home closing costs and more. With the help of trusted lenders, we offer incentives and savings that make sure buying a home is more financially attainable for you.

If you're looking for new homes in Greenville, SC, Cothran Homes has a variety of options to fit your needs. Explore our communities and floor plans to find the home that’s right for you. Then, contact us to get started. Let’s make your dream of homeownership a reality!