Being a first-time home buyer is an exciting experience!
But the lack of knowledge about the home buying process, local area and housing information along with making some impulsive decisions can steal the thrill of being home owner later when you realize you could have done few things differently. Our knowledge and experience will guide you in the proper way to be the first time homeowner. And below are few tips you may want to consider:
Pay all current debt and improve your credit score
Owning a home is an expensive affair. When you are renting, you don’t have other expenses than paying the rent. When you are a homeowner, other than your monthly payments, you have many other expenses like annual taxes, house, yard & pool maintenance, etc. So it’s a good idea to be pay off all your debts first before you buy a house and start fresh to enjoy your new home. This in turn, helps improve your credit score. And higher credit score will get you that ‘prime' rate, saving you thousands of dollars at the end of the loan term that you would have paid in additional interest charges.
Save for a down payment and closing costs
The norm is you need at least 20% of the total loan amount as a down payment. You can still qualify for the loan with a less down payment, but lenders will charge you PMI (private mortgage insurance) which will add up to your monthly payments. You will keep paying this additional amount until your equity in the house reaches 20% of the loan value. Also to consider is closing costs that can go up to 3-4% of the loan amount. So, it’s a good idea to start saving for all that well before you decide to buy a house.
Buy a house you can afford
Determine what you can afford to spend on your monthly house payments. This includes mortgage payment, yearly taxes, insurance, HOA fees, yard and pool maintenance, pest control, and other maintenance expenses). Once you decide this amount, stick to it. When you go house hunting, it’s easy to get emotionally attached to a big beautiful house you see but be practical. You don’t want to go ‘house poor’.
Compare rates from several mortgage lenders
Usually, all lending terms have some hidden costs. So, ask the right questions to them and read that fine print. You will be surprised to find quite a difference between each lenders’ terms.
Get Pre-approved for a Loan
You can get pre-qualified for a loan and get a pre-approval letter from your lender before you start your home search. Pre-approval tells sellers that you’re a serious buyer.
Research Neighborhoods
Make sure you visit the neighborhoods at different times and days to check for traffic conditions, noise levels, or any other happenings. Visit during night time too and see if you feel safe. Choose a neighborhood that you and your family feel comfortable about.
Make a Competitive Offer
Once you find the house, make an offer to the seller. Here, our expertise as your real agent comes to play. We have industry tools and knowledge to determine the best price you can pay for any house while determining market conditions if it is a buyer’s market or a seller’s market. We find the house of your dreams at the most reasonable market price.
