5 First Time Homebuyer Tips
As you begin to think about buying your first home, there are many things to consider. Here are five first time homebuyer tips to help the home buying process go more smoothly.
Understand the True Costs of Homeownership
As a first time homebuyer, you may think you can afford to own a home simply because you can afford a mortgage payment. However, the true cost of homeownership is more than that single payment. You will also need to be able to afford the following:
- Homeowners insurance
- Property taxes
- Maintenance
- Higher utility bills
- Homeowner’s association dues
Keep in mind that many of these costs go up each year. This means you need to plan accordingly.
Look for Your Loan Before You Find Your Home
It is not unusual for a first time home buyer to begin looking at properties right away. However, you should always get a mortgage prequalification first. In this way, you will:
- Know how much home the lender says you can afford
- Limit your searches to homes that fit your budget
- Keep from wasting your time and efforts on homes out of your price range
Always Use Professional Help
Trying to buy a home on your own is not a great idea. A good buyer’s agent will:
- Recommend lenders for the pre-approval process
- Help you find the right house in the right neighborhood
- Negotiate an offer that will be accepted by the seller
- Prepare all offer documents
- Provide a list of professionals to help get you to closing including the inspector
- Renegotiate repair items after due diligence
- Be the go-between between you and the seller
- Finalize loose ends for closing
Look for Down Payment Help
A big first time homebuyer mistake is to spend all their savings on the down payment without looking for programs that can keep their down payment lower. There are many great programs that can reduce your down payment from 20% to 10%, 5%, 3.5%, or even no money down. These include such programs as:
- FHA
- USDA
- VA
- And more
Don’t Make Big Changes That Will Affect Your Credit Report
Just because you have been prequalified does not mean that the lender must provide you with a loan. Your lender will look at your credit one more time before closing to be sure that your credit rating still justifies the loan.
The problem is that many people begin buying large items for their new home before the closing. New loans on your credit report can cause your lender to back out on the deal they’ve made with you.
Between your prequalification and closing, be sure that you do not:
- Open new credit card accounts
- Get a new loan
- Add large amounts to current credit card debt
- Change jobs
Keeping your credit score the same will help the closing go off without a hitch.
For more tips on making the home buying process go more smoothly, especially as a first time homebuyer, give us a call. We cannot wait to help you find the home of your dreams.