Top 5 tips for first-time homebuyers before shopping for a home.
Get pre-qualified. Looking for a home without getting pre-qualified by a lender is like going shopping with no money. When you go to a lender to get pre-qualified they will examine all of your debts, income, retirement savings and other assets and assess how much you can spend for a mortgage. Pre-qualifying for a mortgage is a very important step to home ownership (the most important in fact) and should not be circumvented. Many homebuyers just want to start looking for a home with no actual idea of what they can afford. Some just look at their monthly expenses and come up with a random figure (in the market I work it the figure is usually $1200 for some odd reason) without ever talking to a lender. Once they do speak with a lender they are often pleasantly surprised to find out they can afford much more or they come away with a much more solid idea of their financial situation and how a mortgage will effect their long and short term finances.
Research the community. When I bought my first home the extent of my research was finding an area where the home prices were affordable based on our income. I never thought to research the community, the walking trails, the nightlife, grocery stores, libraries, coffee shops etc. All things that were important to my lifestyle. I absolutely loved my new home but it took me many years and lots of complaining to the husband until I finally got out and researched my surroundings (and I was a Realtor!). The moral of the story is that a home is more than a house. It’s a neighborhood and a community, so make sure that it is the right place for you and your family. If you are a Palmdale CA first time homebuyer you can visit the cities' website for more information about the community.
Consider the hidden expenses. Your lender will calculate your mortgage payment, but they won’t calculate all of the other expenses of purchasing a new home. You will need to consider expenses that you didn’t have when living in an apartment like window coverings, lawn care, home maintenance, additional furniture and decorative items, increased utility costs and the list goes on and on. Make sure you budget for these items in addition to your mortgage.
Learn about mortgages. A big reason why so many homeowners got into trouble during the real estate bubble is that they signed mortgage documents and they had no earthly idea what they were signing! If you don’t know about interest rates, APR and various mortgage terms it’s a good idea to do a bit of research before contacting a lender. You don’t have to study it like your getting a finance degree, but at least be familiar with the terms and how they affect your mortgage, so that your lender does not sound like they are speaking another language to you when they are explaining your financing options. A good site for this is bankrate.com. The site some very informative, easy to read articles for the average consumer.
Hire the right Realtor for the job. When homebuyers are looking for a Realtor they tend to believe that anyone with a real estate license can get the job done, not true!!! That is like saying that anyone with a medical degree can perform surgery! Top real estate professionals are highly trained and spend many hours studying market trends, neighborhoods, local inventory, local politics and so much more. All of these activities help serve their clients in a highly competitive market. They also know how to take a real estate transaction from the initial contact with you all the way to a happy and smooth closing all the while making the process seem seamless for the buyer. A real estate transaction (particularly for a first time buyer) can be very stressful. An experienced Realtor will know exactly how to advise and guide you through the process from beginning to end. Hiring someone because they are your husband’s, nephew’s co-worker is not the criteria you want to consider for making a purchase that will affect the rest of your life. Contact your local real estate office and ask for a referral. They will always refer you to the top agent in the office. Meet with at least 2 agents before making a decision because expertise is the most important criteria, but it’s also important that your personalities are a good fit as well.