As a first-time homebuyer, your mind is most likely filled with an overwhelming amount of questions. How do I know what I can afford? Are there programs to help me with the buying process?
With so many different questions and concerns on your mind, you need to know a few tips to help you throughout your search. Buying a house is a big investment. It might even be the biggest investment you ever make.
Because of this, there’s a lot that goes into the home-buying process. Depending on what your own personal situation is, you want to find a home that will give you everything you need. Before you begin the process, be sure to know what you expect from your future.
Do you plan to have children in the next few years? Do you plan to leave your current job and find another one soon? Take your future plans into account and then continue reading below.
Here are a few tips that every first-time home buyer should know!
1. Get Your Loan Pre-Approved
Before you can begin to look at houses, you need to know what your budget is. What can you afford? The last thing you want to do is fall in love with a home that’s out of your price range. Click here to learn more about how to get the best rate on a home loan
To prevent this from happening and to keep a realistic mindset, get pre-approved for a loan first. Once you’re approved, you’ll know what you can and can’t afford. It’s also a good idea to ask your bank about different loans available to you as a first-time home buyer before making a selection.
2. Save for a Down Payment
As a first-time home buyer, you’ll most likely be given a break on how much you have to hand over as a down payment. Although you won’t be required to put down as big of a percentage as other home buyers, keep in mind that the less you put down on a home as a down payment, the larger the mortgage is.
You also run the risk of being required to purchase mortgage insurance. It’s ideal to begin saving for a down payment as soon as possible. Have as much money set aside that you can save up and remember that even a small percentage of a mortgage can be a big number depending on the price of the home.
3. Hire a Real Estate Agent
Hiring an agent might seem like an unnecessary cost, but it could save you time and money in the long run. Real estate agents know a good deal when they see one, and they know when a home is overpriced.
Real estate agents will take their expertise and knowledge of the real estate industry and pair it with your own personal home needs to help you find something that you love and is in your budget. These agents will do a lot of the work for you, such as finding homes for you and then presenting you with them.
Some agents even get insights on homes before they’re even placed on the market.
4. Work With a Title Company
Using a title company will ensure that the title on the home is a clean title and that the legal transaction of buying the home is free of error. If a lien is on a home’s title and you purchase the home without the knowledge of this, then you could be hit with some costly surprises.
Making any errors during the legal process could also cause major trouble for you as a new homeowner. Avoid these issues by working with a title company, and give yourself peace of mind.
5. Complete a Home Inspection
Home inspections are an essential step in the home-buying process for first-time buyers. Although you may not see any faults in the home upon viewing it yourself, an inspector will discover problems not seen to the naked eye.
Some major issues that a home inspection can save you from are roof issues, problems with the home’s foundation, and more. If an issue does arise during the inspection, know that the seller isn’t required to make the repairs, but it does act as a great negotiation tool.
Most sellers will lower the price of the home, or make the repairs to ensure you don’t walk away from the sale.
6. Wait for the Buyer’s Market
When buying and selling a home, there is a buyer’s and a seller’s market. If you purchase a home during the seller’s market, then you can expect to pay a higher price. To avoid this, try to wait until it’s the buyer’s market to begin shopping.
When more houses are for sale than buyers looking to buy, this is the buyer’s market. A real estate agent can help you determine the best time to begin your search.
7. Research First-Time Home Buyer Programs
As a first-time home buyer, you may have a few programs available to you to aide you throughout the process. You may find that these programs offer assistance for down payments, interest rates, closing costs, and even tax credits.
It’s always best to look into these programs in advance to see what kind of assistance is available to you.
8. Stick to Your Budget or Below It
When you’re pre-approved for a loan, you know how much you’re able to afford. You might feel tempted to find a home at the top of your budget, but we’d recommend otherwise and here’s why.
There are many other costs that you need to plan for other than the mortgage on the home. For example, the cost of the home doesn’t include closing costs, and you’ll need to budget for that as well.
After buying the home, expect to have a few issues arise here and there such as a broken appliance. If you stick to your budget or below it, you’ll have the money to make some upgrades or necessary repairs.
Make the Most Out of Your First-Time Home Buyer Experience!
Buying a home for the first time is stressful, but it’s also exciting. Make the most out of your first-time home buyer experience by keeping these tips in mind!
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