July 16, 2024

Buying Your First Home – Tips To Remember

3 min read
buying your first home

Finding your first home can feel like climbing an endless staircase in the dark, yet simultaneously exciting and terrifying all at the same time. Not only will this purchase represent one of your largest financial commitments ever, but its consequences could last a lifetime.

Preparation is key when purchasing your first home, and here are a few first-time buyer tips that you will surely appreciate.

Get Preapproved

If you are serious about buying your first home, getting preapproved for a mortgage should be your top priority. Doing this will give you an understanding of your price range as well as signal to agents and sellers that you are serious buyers.

Your credit and income history will allow us to give an idea of the interest rates you could qualify for, enabling you to shop around and find the best possible offer.

To be preapproved, lenders require financial documentation such as your tax returns, pay stubs and bank statements. Once submitted to them for verification purposes, lenders will typically offer you a three-month preapproval letter; it will remain valid if no further debt or changes to finances occur within this time.

Make a List of Your Needs and Wants

Before embarking on your home search, it is essential that you establish clear expectations regarding your needs and wants. This conversation is also an ideal time for couples buying as a team. Housing affordability is important to take into account but you have to dig deeper.

Some factors should remain non-negotiable, such as meeting your budget and finding a home near schools for your children. Other items can be more flexible; you might desire a primary suite with spa tub but if it fits all other needs and can afford it better then giving up this luxury may not be necessary.

Keep in mind that it is unrealistic to expect everything you desire in a house; having realistic expectations makes the process less stressful. A needs and wants checklist will help manage expectations and make the most out of house hunting experience.

Look at Your Budget

Before purchasing your first home, it is crucial that you carefully assess your finances. Make sure you can afford both the mortgage payment and other expenses while having enough savings saved up for an emergency fund.

As a rule of thumb, no more than 28 percent of your monthly gross income should go toward housing costs (i.e. mortgage payment, property tax payment, insurance premiums and/or homeowner association dues if applicable).

Consider other costs associated with homeownership, such as moving expenses, renovations/repairs and additional utilities. Check with local first-time buyer programs to see if you qualify for assistance; it could help reduce your down payment and closing costs significantly.

Find a Real Estate Agent

Real estate agents will assist in finding properties within your price range and guide the purchasing process, offering advice and making recommendations about lenders, escrow officers and home inspectors as needed.

Word-of-mouth referrals and online reviews can be an excellent starting point when looking for an agent, while using an agency matching service may also be worthwhile.

Once you have identified some potential agents, conduct interviews. Ask how long they’ve been in business and about their experience helping buyers like yourself. Some agents may possess specific credentials such as one for working with first-time homebuyers; inquire further into this aspect of their education and training. Ideally, find someone who listens carefully and understands your goals well.

Make an Offer

Once you’ve found the home of your dreams, it’s time to make an offer. Just before doing so, be sure that you have enough cash saved up for both down payments and closing costs as well as ongoing expenses such as property taxes and mortgage payments.

Preapproval for a loan is an integral step to making your offer appear more credible to sellers, while meeting neighbors and gathering their perspectives can give a good sense of what might become your forever home. Questions to consider might include frequent power outages; proximity to jobs/commutes in future; all these factors could determine its acceptance.

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