Purschasing a home is both exciting and intimidating. There are so many considerations and it is a big learning curve for new buyers. New home buyers need to be informed and confident while going through the process of purchasing a home. Below is a checklist for the first time home buyers to use as a guide while planning to purchase their first home.
Some considerations are necessary to take into account while beginning the process of looking for homes. It is important to be aware of the following:
Arrange for financing- Getting pre-qualified or pre-approved for a home loan is essential before starting your home search. Speak to a mortgage lender to find out if you are credit worthy and to find out how much home you are able to purchase. Knowing how much for which you qualify will help keep you from looking at properties out of your price range.
Location- Set priorities and know what you want to avoid buyer's remorse. Sometimes you can get more space for the budget you have by buying in a less popular neighborhood. On the other hand if the neighborhood is very important to you, you may need to consider a smaller home. Check to see what amenities are there in the neighborbood and how close you are to your work and other places that are important to you.
School District- Whether or not you have children, the school district your new home is in effects market value and resale possibilties. Good school districts attract new buyers and often mean the price of the home will be better than in less favorable school districts.
Neighborhood plans- Make sure you know what the development plans are for the neighborhood you are looking to buy in. Will there be now parks coming soon? What businesses are coming into the area? Is there a Home Owners Association? Knowing answers to questions such as these will help you make an informed decison. Factors such as these can effect the future sell of your home.
Down Payment- What kind of down payment do you have for your new home? Depending on your loan product your down payment may vary. The more down payment you put down the more equity you have in your home investment. The larger the downpayment, the more favorable your offer will look to the seller of the property. The amount of your downpayment will also effect your monthly payment.
Closing Costs- In addition to the down payment there are closing costs that will need to be paid at closing. Generally the closing cost can be 4%-6% of the loan amount. Your real estate agent can talk to you about how some of these cost can be negotiated with the seller.
Inspections- If you think you have found your dream home, have it inspected. Once done, review the inspection report. Review and discuss with your real estate agent any points that come up in the inspection. With your real estate agent's assistance, negotiate any repairs that were recommend in the report.
Set a budget- There will be expenses beyond the downpayment and closing costs once you have closed on your home. There will be monthly utility costs as well as home maintenance items. The size of your home will also effect the cost of maintaining the home.