When you think of St. Patrick’s Day, one of the first things that comes to mind may be the color green. Green food, green clothes, green decorations – even green beer. But this St. Patrick’s
10 Tips For First Time Homebuyers
Dated: October 29 2020
Know your needs
First examine your lifestyle, and figure out what type of locale you see yourself settling in. Urban, suburban, rural? Urban areas often provide great social, cultural and career opportunities, within a bustling city backdrop. Perhaps you’d prefer a rural landscape, with more privacy and space to roam the outdoors? Or maybe a suburban city would be ideal to raise a family and connect with your local community? Think about the lifestyle you’d like to make a home in, and narrow down which neighborhoods you’d like to consider. Drive around and visit those neighborhoods at various times of the day/week…explore nearby grocery stores, schools, talk to the neighbors. Know your needs and do your research.
Know what you can afford
To make your search most effective, carefully examine your budget and what you can afford. There’s more to consider than just monthly payments: utilities, property taxes, homeowners insurance fees, homeowners association fees (if applicable), repairs, maintenance…it all adds up so be sure to account for all costs before deciding if becoming a homeowner is right for you.
Identify your potential down payment
Do you have 20% of your target purchase price available for a down payment? That’s often considered the industry norm, but there are other options available. There are a variety of loan programs for various credit levels, for those who cannot afford a significant down payment. Some mortgage programs have loans that offer a 3.5% or even zero down payment option for veterans and active military. It’s important to note, however, that most loans that offer less than 20% down have additional insurance premiums that will add to the monthly payment.
Find a local Buyer’s Agent
A Buyer’s Agent represents the buyer’s needs and helps you locate the property that best fits your what you’re looking for. It’s best to find a local agent who has extensive experience in that neighborhood–that way they have insight into local taxes, schools and new developments, as well as the fair market value for the homes you’re considering. Doing this will help alleviate any uncertainties or stress, and make the buying process much more efficient. We are here to help you with this!
Get credit ready
Buying a home may be one of the largest financial decisions you’ll ever make. Be prepared. Get a copy of your current credit report, identify any discrepancies, and get them fixed — if possible — before you talk to a lender. You can also look up your credit score ahead of time for free from Credit Karma.
Hit pause on any large credit card purchases
Avoid taking out any loans or adding significant debt to credit lines before you try to purchase a home. Large purchases, such as a car loan or lease, may impact your debt-to-income ratio. Changes to this number may affect your ability to qualify for the loan amount you require.
Meet with a Lender
This is one of the most important steps: meet with a lender to get a mortgage loan. You can’t really buy a home without one (unless you purchase it outright!) Borrowers with a high credit score (720+) can shop around for the lowest interest rate, and get a conventional loan. Those with lower credit scores (640-) may have a higher interest rate on their loan due to the larger liability for the lender, but there are still many great options available. We recommend contacting a trust-worthy, well-experienced lender to help you.
Demand full disclosure and a professional home inspection.
Now you’ve found a home you’re interested in, it’s important you demand full disclosure from the seller. While most states require the home seller to disclose any potential problems with the property, they may not always know or reveal existing structural problems. The only way to truly know what’s going on inside a home’s structure is to secure the services of a reputable home inspector. Expect to pay $300-600 for the inspection. It seems steep, but consider the thousands it could save you if the home isn’t up to code or has major issues.
Get it down in writing
The best way to truly protect yourself legally is to get every detail of the sale in writing. Also it’s important you understand every aspect of the commitment–learn your real estate terminology and asks lots of questions before signing the agreement.
Purchase homeowners insurance
Once you’ve made sure the title is clear and there are no problems with you taking on ownership, make sure to purchase homeowner’s insurance. If something happens to your home or your belongings, it’s now your responsibility to take care of it–not your landlord or management company. Shop around at least 3 insurance companies, and make sure you’re not just getting the best price, but also the best value and coverage. Now you know the Top 10 Tips every First-time Home Buyer should know. Now get out there and start shopping for your new home!
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