Buying your first home is a big step. You're making a commitment that will last for years.
However, that hasn't stopped people from taking the journey of homeownership. Reports show that there were more than 5 million homes sold in 2018.
There is a lot to learn when you purchase a home the first time. Below are seven tips for your first time home purchase that will help you find the house you're looking for.
1. Get Your Mortgage Early
It takes a lot of work to find the home that will work for you. Some people can take months to look through listings and find the perfect home. The last thing you want is to find what you're looking for and find out that it's out of your price range.
If you plan to get a mortgage to finance your new home, make sure you get your pre-approval letter before you start your search. Your lender will tell you how much you can spend on your home with your mortgage.
A pre-approval letter will also help you if you're competing against others on price. A seller might not always sell to the person with the highest offer. If they see an offer for less money but are already approved for a mortgage, accepting a lower price will be the safer decision.
2. Buy at the Right Time
The real estate market has ups and downs, just like any other industry. If you know when the right time to buy is, you can get a better deal.
People are more likely to buy real estate during the summer months when the weather is nice. If you buy during this time, you can end up with more competition and higher prices.
If you know when there is less demand, try to buy during those times. You can end up getting a better deal.
3. Avoid Financial Changes
You aren't guaranteed your mortgage once you get pre-approved for a loan. Your lender knows what your profile is when you first apply for a mortgage. If it takes time for you to find your home, things can change.
Avoid taking out any loans and applying for credit until after the whole process is over. Applying for credit will drop your credit score several points. This drop will stay on your record for several months, so a lender can re-evaluate your mortgage when they see it.
Taking on another loan will change your debt to income ratio. Your lender doesn't want to see a lot of your cashflow going to debt. If this increases, it makes you a more risky investment and can jeopardize your mortgage.
4. Figure out What Home Features Matter Most
The majority of people have their own ideal about what makes a home great. You want all of those things to be in the home you buy. Unfortunately, this can cause many people to put off buying their home.
Make a list of all the essential features you want in your home. You won't be able to include everything you want in this list.
If this list is too long, you'll end up skipping deals that would work great for you. You need to be able to compromise on what a home has if you want to find a deal. You can always renovate your home at a later date to add the things you think are missing.
5. Don't Ignore the Neighborhood
Have you found a house that looks perfect for you? That's great. However, don't jump into a deal without looking at the surrounding neighborhood.
Make sure the neighborhood you live in has access to all the amenities you expect in your everyday life. Check on your entertainment options, grocery stores, and nearby parks. You don't want to spend too much time driving to the places you want to travel to.
The next thing to check is the crime in the area. You might be able to get a great deal in a bad part of town. The question is, will it be worth putting yourself in risky situations?
6. Find the Right Real Estate Agent
Some people put off working with a real estate agent because of money concerns. The good news about being on the buying side is that you won't pay your real estate agent anything.
A real estate agent will take their fee from the sale. Their fee is split between them and the agent for the seller. All of this comes from the money the home seller makes on the deal.
Use this to your advantage and find an agent that has experience in the area you're buying. They will know what a great deal looks like and can help you reduce the time it takes to buy your home.
7. Never Skip a Home Inspection
You can't take a seller at their word when it comes to the health of their home. You don't know for sure what inspections the seller did beforehand. There can always be problems with a house that are unknown.
If you don't know about these problems before you buy, you're going to be on the hook for fixing any issues yourself. You can avoid this by getting a home inspection.
A home inspector will look at the home and find any signs of problems. Some things they might find are a need for foundation repair, electrical work, and plumbing problems.
Once you know the problems a home has, you can decide if it's still worth buying. If you still want the home, you have the option to negotiate with the seller and have them handle any serious problems.
Follow the Above Tips for Your First Time Home Purchase for Success
The last thing you should do is jump into buying a house without doing your research. Make sure you follow the tips for your first time home purchase to maximize your chance for success. The more you understand the process, the better you can narrow down the home choices available to you.
Of course, there is more to learn about homeownership than the times above. Keep reading our latest posts to learn what else you need to know about the home buying process.