Posted in Mortgage

Tips For First Time Home Buyers

Tips For First Time Home Buyers Posted on March 11, 2020Leave a comment

Purchasing a house is probably the biggest purchase you’ll ever make – it’s a big decision and takes a lot of careful consideration. If you’re feeling overwhelmed and don’t know where to start, check out these simple first time home buyer tips.

Get serious about saving for a downpayment

While it’s common to put 20% down, many lenders will allow first time home buyers put down as little as 3%. Keep in mind, the less you put down for your downpayment, the higher your mortgage insurance will be.

If you’re looking for ways to put big chunks of money away, consider putting tax refunds, work bonuses and other big pieces of income toward a house savings plan.

Determine what you can afford

Before you start looking for your dream home, make sure you know what you can afford. Figure out your price range and stick to it when it comes to house hunting. Yes, you may be able to afford a more expensive house, but when it comes to monthly mortgage payments, you may seriously struggle. Figure out what you can safely afford and stick to that.

Hire the right agent

Since your real estate agent is inevitably going to be your right hand-man for the length it takes you to find a house, make sure it’s someone you trust and get along with. Your buyer’s agent should be skilled in their profession, motivated and knowledgeable.

Find your ideal house type and neighborhood

You may want a home in a community – but can you afford the extra maintenance costs and HOA fee? Consider if that is something that fits into your budget. Condos or townhomes might make more sense for you. If you know you don’t want to live near a city, know which neighborhoods you like in a suburban area.

  • Research nearby schools.
  • Research local safety and from statistics.
  • Research nearest hospitals, groceries, pharmacy and other amenities.
  • Drive through the neighborhood on various days to check out traffic, noise and activity levels.

Budget for closing costs

You’ll need to budget for the money required to close your mortgage. Closing costs can run between 2% and 5% of your loan amount. You’ll want to prepare for those costs. You can also defray costs by asking the seller to pay for a portion of your closing costs or negotiating your real estate agent’s commission.

Don’t neglect negotiation

There’s a lot that an be up for negotiation when buying a home. You could save a lot of money by practicing negotiation. If there are any major repairs that you can get the seller to cover, asking the seller to pay for some of the closing costs, etc. If you’re in a buyer’s make, you may find the seller will bargain with you to get the house off of the market.

Stick to your budget

Since buying a home is such a big financial move, you’ll want to stick to your budget. Look at properties that cost less than the amount you were approved for. You’ll want to take into account differently monthly expenses or problems that may arise during homeownership. Shopping below your preapproval amount will also create some wiggle room when bidding on a house that has multiple offers.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.