You are ready to take the next step in your life; you are ready to buy your first home! Buying a home is both exciting and nerve-wrecking for first time home buyers. While we cannot tell you exactly what there is to expect since every transaction has a different story, we can give you the 10 best general tips you will need to know before and while taking this step!
- Do your financial research! This is a large investments, and probably your biggest purchase. Be sure to know you have enough saved up to cover the down payment, closing cost, prepaid expenses, utility adjustments, and cash reserves. Our advice is to research the neighborhood and type of home you are interested in moving into. Check out what their average cost goes for and go from there. It is a great indication to help you see if you are ready now, or need to work on saving more.
- Check your credit! Your credit score is some of the most important factors when it comes to buying a house; it will help determine if you are qualified for a loan and the cost of it. Most credit cards now give a free FICO score if you are unsure where your credit stands. Being that you are a first-time homebuyer, you will most likely have a lot of credit available!
- Understand your cash flow! Evaluate your assets and liabilities. This means that you should have a good idea of what it is you and what is coming in monthly. As a first time homebuyer, track your spendings for a couple of months to see where your money is going. This will not only help you determine what can be cut out to save, but will also give you an idea on how lenders will see you.
- “I can only afford to rent”. If you are paying rent, you will be able to afford to buy! The tax interest you will get back on mortgage interest makes up for the difference between a rent and your mortgage payment.
- Organize your documents! If you are pass all the above bullets and you are ready to sit down and apply for a mortgage, arrive to that meeting prepared! Mortgage lenders will typically request two recent pay stubs, you previous two years of W-2’s and the past two months of bank statements, including the blank pages that come with these documents.
- Get pre-approved before searching! While this is not a must, completing this step first will take the guessing work out of your home search. This will allow you and your realtor know you are a qualified buyer and how much you can spend, also while already knowing what your monthly payments will be. This will also keep you considered as a stronger buyer when you put in an offer.
- Do not wait for the market! If you are waiting for the prime-time in the buyer’s market, you may miss a perfect opportunity! It is not so much about timing as it is about smart shopping. Make a list of the needs and wants for your dream home.
- Your first home does not have to be your dream home! If you cannot afford your ideal dream home, you can still buy a home in general. You need a stepping stone to get closer to owning your dream home by owning your first home. This means that you are buying your first home to act as a “forced savings plan”. This can help build up your credit when you buy with the potential to sell.
- Find the right real estate agent! When doing this, we advise you to not be afraid to ask questions! You will be working with this person for a couple of months and they will be guiding and helping you with your new investment; you are going to make sure you mesh well with them: both your personalities and schedules. While building this relationship, you are going to want to ensure they understand your needs and wants while having your best interest in mind; make sure your realtor will see you as a person taking on a big step and not as a paycheck! This one step will make the process less bumpy and more enjoyable.
- Find the right company to guide you through this purchase! Buying a house is a detailed and complex process that you are going to want done right. You are going to want to know as much information about the house you are planning on purchasing, the contract you will sign, and the area you are moving into. RealEstateSINY.com is here to help you and ensure you are fully informed of the decision are purchase you will be making. With their expansive technology, listing catalogue, and trained professional Realtors, they will provide you with all the help you will need to find the right home for you!
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