Every year thousands of all homes purchased are by first-time homebuyers. While it can be a daunting task, owning your own home is very rewarding. Listed below are ten tips to help make the process less intimidating.
Consider the following:
1. Your credit: Poor credit will make you a much larger risk in lender eyes and a larger risk means higher interest rates and higher monthly mortagage costs. Make a point of paying your credit card payments, auto loans, rent, and other payments on time, all the time, and in full. In addition keep your credit card balances low. Higher balances mean higher risk in the eyes of the lender.
2. Taxes and Insurance: Keep in mind that in addition to your mortgage payment you will have to pay taxes and insurance. Sometimes this is not included in your mortgage payment and can be quite a shocker when you see how much it increases your total monthly payment.
3. What about the real estate agent: Real estate agents are at the center of most property transactions. It's important for you to know what an agent does, who is represented, and how the system works. Be sure to ask the agent who they work for, who pays them and what your obligations are.
4. Consider what location will work best for you: Look at your needs, the needs of household members, and your preferences in terms of commuting, shopping, recreation, and other factors that are important to you.
5. Plan on getting a home inspection as part of any offer you make: A professional inspection can help you understand the condition of the property and any potential hidden defects.
6. Talk to a lender: Get pre-approved by a lender so that you know how much you can borrow and what you can afford. There is a big difference between pre-qualification and pre-approval. Ask your Lender about the difference.
7. Save money: You'll need money for a down payment, closing costs, moving and other expenses. Do anything and everything you can to reduce expenses and save money.
8. What type of loan is best: Consider FHA, VA, as well as conventional loans. Work with your lender to determine which loan is best for you.
9. Grants, gifts and potentially free money: Many first time buyers receive gifts from relatives and friends. Some companies also offer grants and other incentives to employees who are buying a first home. Community groups may also have prograams and financing in place for first-time buyers, while the federal government has established special programs for teachers and police officers. Search for these and ask your Realtor for programs that they may be familiar with.
10. The time is now! Start the search process now. Talk with an agent and start looking at homes. Make a point to search the Internet on a daily basis. There has never been a better time to be a buyer than right now. There is plenty of inventory to choose from and plenty of deals to be had?
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