Tips For First Time Buyers

Advice for First-Time Home Buyers

Buying a home is likely the most important and expensive purchase you will ever make in your life. Despite this, many people rush into the process, making many costly errors along the way.

Once you have decided it is time to purchase your first home, you should figure out what you can afford. Getting pre-qualified for a loan is the best way to determine this. To get pre-qualified, you should work with a lender that you have a good relationship with, or find a real estate agent you trust who can recommend a lender, or search for lenders online.

Ideally, your total monthly mortgage payment should not be more than a third of your monthly gross income. There are many special options available for first-time buyers, such as mortgage programs that require low or even no down payments and no closing costs. You should try to make your down payment as big as possible, because this means you will be borrowing less money, making your mortgage less expensive in the long run. Also, remember that you can usually negotiate your mortgage rate 0.5 to 1 percent lower than the posted rate.

Next it is time to decide what you want in a home and neighborhood. Consider the wide range of options from condos to large houses. If you have a hobby, work from home, or are starting a family, you should consider the extra space requirements. Ask yourself if certain features like large front and back yards, parking, garages, or energy efficiency are important to you. If you would like to rent out part of your house to help with the mortgage, you should look for a home with separate entrances or a finished basement. Once you have determined what type of home you are looking for, find an agent that you feel comfortable working with and who listens to you.

When choosing a neighborhood, consider your needs and wants. Research every aspect of a neighborhood. Find out the proximity of hospitals, emergency services and schools. If you have children, you will want to know about the quality of the schools in the area. Consider your transportation needs. Think about how long a commute is acceptable to you. Are there nearby highways, or public transit that would make your commute easier?

If religious institutions, shopping, dining and entertainment are important to you, get to know the area well, and figure out if it offers what you are looking for. Spend some time in the area at night to find out if you feel safe, and how noisy it is. Also consider property values and property taxes in the neighborhood. Can you afford it? A good real estate agent will be able to provide all this information and more about the neighborhood you are interested in.

Even if certain amenities such as quality schools are not important to you, you should still consider them in your purchase, as they will affect the price you get when you are ready to sell your home. When choosing a home, don’t buy the most expensive home on the street. You are much better off buying the least expensive home in a more expensive neighborhood. If you have narrowed down your search to particular homes, try to observe the neighbors. Do they have frequent loud parties late at night? Do they blast the music on weekends? Do they keep their front yards presentable and clean?

Before you put in an offer on a home, be sure to have it inspected by a qualified engineer, regardless of the age of the home. A thorough inspection should uncover any safety issues, water infiltration, electrical problems, plumbing problems, roofing problems or structural problems. If problems are found, you may want to ask for a reduced price, or continue your search. A good real estate agent will often recommend a trustworthy home inspector.

When you get your mortgage, you will require homeowners insurance. Shop around to find a policy that meets your needs while being affordable. It is definitely worth spending some time researching different policies to find the right one for you.

When you are ready to put in an offer on a home, it should be lower than the seller’s asking price, but within reason. Too low an offer will be insulting to the seller and they will respond with a less favorable counter-offer. A good real estate agent will no what comparable homes in the area have recently sold for, and help you determine what the fair value of the home is. If the asking price seems reasonable, make your offer between 5 and 10 percent lower. The seller will likely make a counter-offer.

It is commonplace to have each party’s attorney review the closing documents and be present at the closing. It is a very good idea to have an attorney review the papers before closing to make sure everything is in order and your best interests are represented.

If you follow these steps and find a helpful real estate agent you can trust, your first home purchase should go smoothly and you will enjoy life in your new home.