Tips for First-Time Home Buyers
A year after the financial collapse of 2008, the housing market is very different than it was before the foreclosure crisis.
Here are a few bits of wisdom for anyone contemplating a home purchase today:
- Old-fashioned basics are more important than ever. The safest way to purchase a home is to put down 20 percent on a fixed-rate, 30-year (or less) mortgage.
- Don't become overconfident about income growth. Even though buyers in their 20s and 30s will likely see their incomes grow more quickly than previous generations, it is important to act sensibly when borrowing.
- Anyone contemplating adding children to the family should calculate whether they could live on one income because having both halves of a couple work may turn out to be impractical.
- Include a maintenance budget. Even new homes need upkeep and repairs.
- Buyers who can't afford their dream home now should opt for a starter home where they can save money each month for what they really want.
- Consider a property that can be expanded and improved down the road when money is available.
- No two buyers are the same, but they should all feel confident with the loan they enter into, no matter the size of the mortgage.
- Obtain your credit report: Learn what your credit score currently is and correct any mistakes you may find on it.
- Become familiar with mortgage terms and conditions: Never sign any legal documents, including a mortgage, if you don't clearly understand the terms and conditions of the contract.
- Shop around: Contact at least three financial institutions to obtain information on mortgage rates, terms and conditions for a first-time home buyer.
- First-time home buying programs: Look into local, state and federal programs that may offer financial assistance to encourage first-time home-ownership.
Finally - and perhaps most importantly - don't get caught up in the excitement and commit to buying more than you can afford. One way to do this is by being pre-approved by your mortgage company. This will tell you exactly how much you can afford to pay, and that will automatically slim down your options.
Encore Realty Group
"Standing Ovations for Outstanding Service"