Buying your first home? Get ready for an exciting journey!

10 tips for first time homebuyers

Buying a home for the first time can be exciting. But there are a lot of new processes you’ll experience and people you’ll need to work with, too. Here are 10 of the top first-time homebuyer tips to help guide you through your journey from start to finish.

1. Identify your needs: You may have always dreamed of a two-story house with a grand staircase and a large yard, but have you considered what you truly need in a home? Where you are in life right now and where you’re planning to go in the future may not be the same as where you thought you would be when you first dreamt of buying a home.

Take the time to consider what your current needs are and what your needs may be in the future. Then make a list of the things you need and want in your new home. Having a clear understanding of your housing needs helps you identify the most important things to look for when viewing homes.

2. Know the true cost of your new home: Make sure you know what your new home will really cost. Your true housing cost includes more than your mortgage payment. A good first start is to use a mortgage calculator to estimate your monthly payment. Most lenders also offer help with this if you want more solid numbers.

You also need to add in the costs of any property taxes and homeowner’s insurance. In addition to your monthly payment, you should also consider the cost of home maintenance, such as taking care of the lawn and yard, maintaining appliances, unplanned repairs or replacements and any Homeowners Association fees if applicable. Do not forget to consider utility costs like electricity, gas, water ,and sewer which could drive up your monthly costs.

3. Build your savings now: Don’t wait until you’ve found the house you want to buy — start saving now. You can start by setting up an automatic transfer to your savings account from each paycheck. You can also use your savings account to set aside bonuses you earn at work and tax refunds.

Building your savings account now is important because there are many expenses you will need to pay for throughout the homebuying process. These include deposits, home inspections, Realtor fees, appraisals, down payments and closing costs. Boosting your savings account now also helps you prepare for expenses that can occur after you move in, such as decorating and unplanned maintenance and repair costs. There may be grants or assistance for purchasing your new home that can help with down payment or closing costs.

4. Build your credit wisely: When you’re preparing to buy a home, you need to be smart with your credit. Lenders use your credit score as a key factor to determine whether to approve you. They also use it to determine the interest rate and loan terms they’ll approve you for. Avoid common credit mistakes that many first-time homebuyers make, such as:

• Taking out a new line of credit
• Avoiding credit altogether

5. Research your mortgage loan options: While many people think a conventional loan is their only option for buying a house, you have several different mortgage loan options available to you. These include FHA and VA loans. Most lenders also offer the option of choosing between a Fixed Rate or an Adjustable Rate (ARM) Loan. Each mortgage loan option has its pros and cons. Consider working with a home lending advisor to find the home lending option that best fits your unique circumstances.
6. Know what you qualify for before you begin shopping: Did you know you can find out what you can qualify for before you even begin looking for a house? You can get preapproved for a home loan with a simple conversation with your mortgage lender about your income, credit, employment and asset information. Getting preapproved for a mortgage loan can help narrow your search because you’ll already know how much you can finance.
7. You don’t have to do this alone: Hiring a real estate agent, like one of our brokers at YOUr Realty Group,means you don’t have to go through the homebuying process alone. As a valuable partner, we’ll work with you to ensure your needs and best interests are met throughout the purchasing process. Choosing an experienced agent who will represent you as YOUr Buyer’s agent helps ensure someone is working with your best interest in mind when finding homes and negotiating purchasing terms.
8. Make the decision in your own time: You might feel like you need to quickly put in an offer on a home, or to accept rates or terms without knowing what other lenders might offer. It’s okay to take your time to understand how everything works. Know what your options are and carefully think things through before you make any decisions.

Rather than deciding based on emotion, make sure you’re well-informed and take your time to carefully consider any decision you make about buying a home.

9. You don’t have to pay the seller’s asking price: You don’t have to make an offer for the full asking price on the home you want to buy. As a first-time homebuyer, rely on your real estate agent’s advice to determine how much you should offer. Ask your agent to help you make an offer that’s competitive but also within your budget and reflective of the home’s value.
10. Prepare for closing: Once the seller accepts your offer, there’s still a lot to be done before you close, like getting a home appraisal, completing a home inspection, doing a final walk-through and completing paperwork related to your loan.

On closing day, you’ll complete the legal and financial paperwork needed to complete the transfer of your funding to the seller and of the home’s title to you. You should prepare to pay between 2% and 6% of the home’s purchase price in closing costs, unless your agent has negotiated for the seller to cover all or some of these costs. Your lender will provide you with a breakdown of all costs prior to closing.

It’s important to make sure there are no changes to your financial status during this time to help the closing process move more smoothly. As you go through the process, make sure you carefully read any documents you receive and ask your real estate agent or attorney to explain anything you don’t understand.

There’s a lot to keep in mind when buying a home, but it’s all worth it in the end. Knowing what the process involves, and how to handle whatever comes up, is a great way to arm yourself for this exciting journey.

For more information, contact Will Woodward II at 971-319-3223 or visit www.yourrealtygroup.com.