Tips For First Time Home Buyers
Are you a first time buyer? When you are buying a home or property for the first time, there are many things to take into consideration. To make the entire home buying process easier, the first thing you should do is put a game plan in motion. First and foremost is planning ahead. First time buyers who have a plan will be far more successful than those who don't.
Buying a home for the first time is a lot more than stopping by some open houses. Are you actually sure you are ready to buy your first home? Before you even speak to your bank or contact a real estate agent, there are a few things you should be thinking about. Over at Maximum Real Estate Exposure, you'll find some of the best tips for first time buyers that are worth reading along with some additional help here.
How Much Money Have You Saved Up?
You need to make sure you have saved up enough money to buy your first home. You would not be the first time buyer who would happen to fall in love with a property and realize you don't have the requisite amount of funds.
Planning ahead by setting yourself a budget is a top priority. Yes, you need to be realistic and make sure you are not overspending. Be honest with yourself and take all things into consideration. Here are some of the things you should consider;
- The amount of money you have in your savings.
- Your job security - make sure there is nothing that could potentially out of work.
- Your credit status - where do you currently stand with your credit scores. While you can get a mortgage with bad credit, the terms you receive will not be highly desirable.
- Availability and cost of loans and mortgages - what kind of mortgage should you be looking at? There will be many options for first-time buyers.
Checking Your Credit Status
Before you make any commitments make sure your credit file looks good. Don't apply for new credit cards or loans at least six months before you think about signing up for a mortgage. All prospective lenders will check your credit file.
One of the best first-time home buyer tips is to look at your credit report for mistakes. Contact one of the leading credit agencies and request your credit report. You don't want to end up being faced with any nasty surprises. Credit fraud is common and can happen to anybody. It is better to know your credit score. This is what lenders will use to qualify you for a mortgage. The better your credit score is at the time of asking for a mortgage, the better the interest on any loan or mortgage will be.
Given how essential credit scores are for the terms you receive from a lender it is imperative to make sure your credit is the best it can be. Here are some of the best tips for increasing a credit score.
How Secure Is Your Job?
You need to make sure you can pay for the mortgage. If you think you could potentially face a layoff or have your hours cut in the next year, don't even contemplate buying a home.
Increasingly lenders are running credit checks on the companies borrowers are employed by. This is to ensure that the borrower's job is secure and he can afford to pay for the mortgage.
Set a Budget for Everything
You should also plan ahead by setting a budget. There is a lot more to the first time home buyers budget than meets the eye. You may think you are going to spend all of your savings on the deposit, but this is not the case.
The average first time buyer does not budget for home inspection fees and closing costs. There are other essentials you need to consider before you sign on the dotted line of that mortgage agreement.
Do you have enough money to cover home insurance, decorating and new furniture costs? Those are three essentials many first time home buyers don't even consider when it comes to buying a home. You may also have other move-in costs such as repair expenses to the property.
To help you to save as much money as possible, you should never miss out on negotiating a better price.
Make Sure You Get Pre-Approved For a Mortgage
Before you start looking at homes to purchase it is imperative that you get pre-approved for a mortgage. Doing so is an absolute must. When you find your dream home, you'll need to be in position to write an offer immediately.
Keep in mind real estate is a competitive business. The odds are good that other folks could be vying for the same home you happen to love. Buyers who can show their financial strength are put on the sellers radar.
One of the first things any seller's agent worth their salt will be checking is the financial qualifications of the buyer. Of course, this includes getting a solid pre-approval letter from a reputable lending institution.
As a matter of fact, you should be making sure you are working with a lender that will go above and beyond in helping you purchase your first home. Make sure you ask the lender these questions to get educated on the financing process and how they do things.
Hire an Exceptional Buyer's Agent
When looking to find your first home it is highly advisable to hire the best real estate professional possible. Many home buyers think of a real estate agent as someone who will be showing them homes. Frankly, that is the least important task of a top-shelf buyer's agent. Anyone with a pulse can do that for you.
There are a lot of tasks the best buyer's agents will handle for you. Your buyer's agent should have their eyes and ears to the ground. They will be your confidant. Someone who will provide a level of expertise for you to make sound decisions. They might even help you discover and buy a home that is not on the market.
Getting stuck with someone who does nothing more than follow your instructions and show you homes could end up being a nightmare. It is not uncommon at all for problems to crop up in a real estate transaction. It can't be overstated how essential it is to have someone guiding you correctly.
What Kind of Property Should You Buy?
Should you invest in a property which is right for today, or right for tomorrow? Property buying is certainly all about planning ahead. You may be single today, but meet your knight in shining armor tomorrow. A two bedroom home could feel a bit cramped for two people.
Perhaps it would be better to buy a three or four bedroom home so you have room to expand? Some people like to rent out a room to a friend for a few years to have some money to fall back on. Doing so could even help you to pay off the mortgage a bit faster. Many banks and loan companies are happy to accept lump sum payments at the end of the year that can go towards paying off your mortgage early.
Stay strictly within your budget and make sure you don't overspend. Don't be afraid to say no and give clear instructions to your real estate agent. Also, listen to what your real estate agent has got to say to you.
Most real estate agents will go to extra lengths to look after a first time buyer as he will appreciate you are likely to come back to them if you ever contemplate moving or buying an investment property.
There are endless amounts of articles online to help educate first time home buyers on the process. It is wise to take in as much information as you can handle. Keep in mind there will be family members who will try to play the "real estate expert" card.
It's very possible some of the information will be very helpful. Don't, however, think for a minute that things are the same as they were twenty years ago when your parents bought their home.
Lots of things change in the world of real estate, even from year to year. Best of luck in your home buying adventure!
Other Real Estate Articles at Active Rain Worth Your Time
- How to pick a loan term for your mortgage - see what considerations you should be thinking about when choosing the length of your mortgage term.
- Avoid these moving mistakes - learn some of the more common moving blunders that can cost you time, energy and money.
Use these additional home buying references to make excellent financial decisions when you are buying your first home.
Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.
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