Buying a home can feel overwhelming to even the seasoned homeowner. But, it can especially be a daunting task if you're a first time homebuyer. Following these first time homebuyer tips can help make your home buying experience a little easier.
Budget - This is an important first decision to make. Not only do you need to decide what kind of a monthly payment you can afford (including taxes and insurance), but you need to determine how much of a downpayment you have to offer. While FHA loans will allow as little as 3.5% of the purchase price as the downpayment, other lender expect 5% while many want as much as 10% down. That's why you need to get pre-approved even before you look for your home.
Pre-Approval - While pre-qualifying you for a loan can be determined by evaluating how much you make, getting pre-approved means that this is what a bank will actually loan you. This helps you determine how much home you can afford and at what interest rate it will be. However, just because you are approved for a higher loan amount doesn't mean that you want to go that high. You don't want to be house rich and cash poor. It's important to figure out the cost of entertainment and other expenses when determining the true amount you want to spend of your pre-approved amount. Also, sellers are more happy to work with a buyer who already has a loan in place rather than one who hasn't.
Preferences - How much time are you willing to spend commuting to work? Do you have kids? What is the school system like? Is there entertainment available in the area? How far away is the grocery store? What is the neighborhood like? These are just a few of the questions you should ask yourself before looking at a home. Sit down and write out everything you want in a house and a neighborhood: bedrooms, bathrooms, size of home, size of yard, pool/no pool, garage size, etc. This will help narrow down your list of available homes and keep you focused on your goals of homeownership.
As always, consulting with your real estate professional is always a good idea. They are trained to help you find that one perfect home for you. By following these first time homebuyer tips and using a REALTOR®, your dreams of homeownership will become reality in no time!
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