10 TIPS FOR FIRST-TIME HOMEBUYERS
Buying a home for the first time can be exciting. But there are a lot of new processes you’ll experience and people you’ll need to work with, too. Here are 10 first-time homebuyer tips.
1. Identify your needs
Are you willing to travel farther for work if it means buying a home in a specific neighborhood? Does a townhouse or condo make more sense than a single-family home? Take the time to consider your current needs and what your needs may be in the future. Having a clear understanding of your housing needs helps you identify the most important things to look for when viewing homes.
2. Know the true cost of your new home
Make sure you know what your new home will really cost. In addition to your mortgage payment, you also need to add in property taxes and homeowner’s insurance as well as the cost of home maintenance, such as taking care of the lawn, maintaining appliances, unplanned repairs and any Homeowners Association fees if applicable. Don’t forget utility costs like electricity, gas, water and sewer.
3. Build your savings now
Don’t wait until you’ve found the house you want to buy — start saving now. Building your savings account now is important because there are many expenses you’ll need to pay for throughout the homebuying process, including deposits, home inspections, appraisals, down payments and closing costs.
4. Build your credit wisely
When you’re preparing to buy a home, you need to be smart with your credit. Lenders use your credit score as a key factor to determine whether or not to approve you. They also use it to determine the interest rate and loan terms they’ll approve you for.
5. Research your mortgage loan options
While many people think a conventional loan is their only option for buying a house, there are others such as FHA loans and VA loans. Lenders also offer fixed-rate and adjustable-rate (ARM) mortgages. Each option has its pros and cons.
6. Know what you qualify for before you begin shopping can
You get prequalified for a home loan with a simple conversation with your mortgage lender about your income, credit, employment and asset information. Getting prequalified can help narrow your search because you’ll already know how much you can finance.
7. You don’t have to do this alone
Hiring a real estate agent means you don’t have to go through the homebuying process alone. Choosing an experienced agent helps ensure they’ll work in your best interest when finding homes and negotiating purchasing terms.
8. Make the decision in your own time
It’s okay to take your time to understand how everything works. Make sure you’re well-informed and know what your options are and carefully think things through before you make any decisions.
9. You don’t have to pay the seller’s asking price
You don’t have to make an offer for the full asking price on the home you want to buy. Ask your agent to help you make a competitive offer that’s within your budget and reflective of the home’s value.
10. Prepare for closing
Once the seller accepts your offer, there’s still a lot to be done before you close, like the home appraisal, completing a home inspection, doing a final walk-through and completing paperwork related to your loan.
There’s a lot to keep in mind when buying a home, but it’s all worth it in the end. Knowing what the process involves, and how to handle whatever comes up, is a great way to arm yourself for this exciting journey.