Purchasing a home for the first time can quickly become overwhelming and complicated. The transaction can cause confusion, stress, and uncertainty for many. While everyone has a slightly different experience, there are many universal tips to keep in mind when you embark on your home buying journey. We’ve outlined some advice for first-time homebuyers to follow.
Get a real estate agent
Purchasing a home is one of the biggest life events someone experiences. Make sure someone is representing your best interests during the complicated process by getting your own real estate agent. It’s possible to buy a home solo or with the listing agent, but that’s not always the smartest move. A real estate agent will ensure your preapproval from a reputable lender, make sure contract dates are followed and negotiate on your behalf to get you the best price. Without this valuable guidance, a first-time homebuyer could end up making a mistake that costs them thousands of dollars. Do some research on the real estate agents you’re considering, and look at their testimonials and yearly stats. Interview a few different agents before settling on the perfect fit for you.
Get an estimate from your lender before you put a contract on a house. This estimate should include your estimated closing costs, how much your monthly payment should be so you’re fully aware of your financial responsibility will be beforehand. Some lenders will automatically do this when you get qualified for preapproval.
Lenders will dig deep into your credit report when they’re evaluating your application for a mortgage to ensure that your credit is stable. They will use your credit report to evaluate your payment habits, balances, and financial standing. A good credit score and clean credit report will get you a better interest rate from your lender. Leading up to the purchase of a home, you should be reviewing your credit report and adjusting your habits to correct any problems you see. Make sure to wait until after closing to make any large purchases or open up any new lines of credit
Know exactly how much you can afford when you set out to purchase a home. This means accounting for all monthly income, expenses, and debt. If you’re debt-free, you can consider buying a home worth up to five times your income. If more than 20% of your monthly income is used to pay down existing debt, make an effort to look for homes that are only three times your income.
You also need to plan for the hidden costs of homeownership. You’re not just responsible for the mortgage payment. Insurance, homeowners association dues, property taxes, and utilities are all expenses that need to be budgeted for. Your realtor can help you get quotes for things like property taxes and insurance to better your estimated costs. Avoid having to choose a cheap cable or wifi plan by altering your price range with these costs in mind!
Use a home inspector
A good home inspector can save you a considerable amount of money in the home buying process. For a couple hundred dollars they will inspect the home you intend to buy and identify any safety hazards or necessary repairs. You can use their report to negotiate with the seller and have them make necessary fixes or give you the money to do so yourself. A home inspection will ensure you’re getting your money’s worth from a home.
Shopping for a home for the first time doesn’t always have to be overwhelming, By following our advice, you can avoid common mistakes that first-time homebuyers make. Have more questions about buying your first home? Contact us today!