So, you have decided to buy your first home? Let me first congratulate you for taking a new step in your life. It is an investment in your future which can give security to you and your family.
It is a fact that buying a home is an extremely important decision and that’s why; one has to take every measure to ensure that they are getting a good deal. There are some important tips that the first time home buyers need to keep in mind:
Do Your Homework
This means that you have to prepare yourself. Start with checking your finances. How much money do you have? What’s your price range? Is there someone in the family or friend who has promised to help you financially? Talk to them and come up with a realistic figure to buy a home. Make sure that you aren’t planning to use all your money. It is important to save some money for emergencies.
Talk to your friends and family members who can guide you. Ask them what are the important factors that you need to look at while buying your first home. It is better to seek advice from someone who has recently bought a home. They can give you good suggestions about the recent market condition.
Check your Credit History
Most of the times, if you are planning to buy a home, you need to have a good credit history. If you’ve recently gone through bankruptcy, there is a chance that you won’t be able to get mortgage. If there are some errors with your credit, try fixing them ASAP.
Evaluate the neighborhoods you’re interested in
Usually, first time buyers have certain areas or neighborhoods in their minds where they want to buy a home. You can start doing your research online. There are different websites that can help you including zillow.com. You can also check our communities section to learn about different cities and check the home prices. If you have kids, you need to find out what kind of schools that neighborhood has. You can narrow down your search to few neighborhoods depending upon your range and needs.
Come up with a budget
While coming up with a final budget of buying your home, you need to calculate few things, which include:
- Cost of living
- Cost of potential repairs
You need to have a separate budget for all these things and then you can finalize an ideal budget for your home.
Research.. Research.. Research
There is loads of information available online. Look for them. Try to understand the entire process of buying a home, so once you are in the field, you have a good idea of how things going to work. If you have any questions or concerns, write them down and ask a professional.
Hire a Professional
Finding a good and experienced real estate agent is one of the most critical steps of home buying process. They can either make the entire process easy or painful for you. That’s why; you need to do your research. It is good to ask for referrals. Go meet and talk to them. Check their website. See what others have to say about them. Tell them what you are looking for. It is important that you meet few real estate agents before choosing one.
Consult a Mortgage Advisor
Talk to mortgage advisor and look for the loan options you can have. They have different categories of loans for different people. You need to find out what suits you best. Traditional or conventional lenders like banks ask for lots of documentations. Their credit history requirement is pretty high but their interest rates are quite low. On the other hand, hard money loans are easy to get with less documentation but high interest rates.
Once you have decided, what kind of loan you want, get pre-approved. A Pre-approval letter is given to you by your lender stating that they are ready to lend you the money. It shows the sellers that you are a serious buyer. There are many lenders who can give you pre-approval letters based upon what you can afford.
Check multiple homes before making a final decision
It is important that you look at few homes before taking a decision. It might happen that you will fall in love with the first home you see but there could be other better options too. Look for them and then take a final decision.
Reserve some cash for down payment and closing costs
Whatever loan you are taking, you need to have some cash for down payment and closing costs. Loans do not cover them. There are some other options which can help you to get money for down payment and closing costs such as unsecured business lines of credit. But it is better to reserve some money rather than looking for other options.
Don’t get too emotional
It is a fact that buying a home is an emotional decision. Especially if you are a first time home buyer, there are chances that you will get emotionally attached or excited about a certain property. It is Okay to be emotional but you need to have a certain boundary of practicality as well. If a home is completely out of your reach and you have to buy it after getting loans from different sources, it’s not advisable to do that. Set a limit for yourself and try to remain within that limit.
Get your home inspected
Home inspection is a process where an expert called home inspector is hired to check the home. A home inspector is an unbiased person who will look at the home and prepare a report, which has all the important information about the repairs a property might need. This report will help you to negotiate with the seller. Remember, that even newly constructed homes aren’t perfect. It’s always a good idea to get your home inspected before making a final offer.
Buying your first home might sound like a difficult task but if you get yourself educated, it’s fun. If you need some more information about homes or the areas you are willing to live in, please fill in the form below and we will get back to you ASAP! GOODLUCK!