Tips For Buying Your First Home
Buying your first home can be an anxious experience in both senses of the word; it’s exciting and nerve-wracking at the same time. Like most new things though, the more you learn about the process, the less nervous you become.
These tips can help you prepare for becoming a first time homeowner. Whether you’re just considering the switch from renting to owning, or you’re already shopping around for an agent to tour homes with, this information will help demystify some of the steps taken and terms used in a real estate transaction.
The first step is getting pre-approved for a loan to help you determine what price range you can consider. Mortgages are offered by numerous sources, from banks, to credit unions, to the federal government. If you don’t know any mortgage loan officers, your personal bank is a good place to start. You can also ask your Realtor for their best recommendation – having worked with scores of financiers, they likely know who is the most reliable choice.
The type of loan you can get pre-approved for will depend upon your credit history, debt to income ratio, and the size of your down payment, among other factors. A thorough questionnaire with supporting documentation is usually all it takes to determine your best options. Remember to ask your lender about first-time homebuyer assistance programs, there’s a lot more free money out there for first time buyers than they usually realize.
Using a bigger down payment will get you the most favorable loan terms as possible, but that’s also usually the biggest challenge for buyers. For many families, helping out with a cash gift towards the down payment is a viable option. Check out this helpful guide for using gift money and how it impacts your loan options for more information.
Write Down a List Of Must Haves
Once you know how much home you can afford, it’s time for the fun part – finding out what you want! It’s helpful to start with a list of features to narrow down your options. Agents can send you new listings on a regular basis that match the parameters you choose, from square footage, to number of bedrooms, to build style, and much more. If you’re not working with an agent yet, you can still visit open houses to start getting a sense of relative value.
Be willing to compromise on your options, and remember that first time homebuyers usually don’t have the buying power to afford everything they want. That’s okay though, and par for the course for a first purchase. You’re looking for your starter home, inferring that this is the beginning of homeownership and not your final destination. That being said, all starter homes are not made equally, and you want to choose one that will hold it’s value until you’re ready to upgrade. It’s hard to make broad sweeping statements about those types of homes because each market is different, so talk to your local agent if you need help finding these hidden gems.
Considering the benefits you want is just as if not more important than choosing features. School district, neighborhood culture, house condition and general location are some of the factors that will affect how you feel about a given house. A two bedroom ranch will have those same features whether it’s on a busy street or out in the country, but it will have different benefits depending on different perspectives. It’s important to visit potential picks and really try to picture yourself living there, because many benefits aren’t apparent on paper.
You can learn quite a bit about real estate and how you can prepare to make your first purchase online, but the best resource is still going to be your local agent. They have a vested interest in helping you make the best decision for you, and the knowledge and networks you need to make it happen. Give us a call when you’re ready to talk about your home buying plans and goals, and we’ll be happy to help you achieve them.