As a first time homebuyer searching for homes, you may feel like you are stumbling your way through a complicated process. In can be daunting, but with an experienced buyer’s agent at your side to guide you and some helpful tips on the “dos and don’ts for first-time buyers, you should emerge from the process successful and happily ready to move into your new home.
- …Arm yourself with information and facts. Begin your search by arming yourself with information. For example, Prudential Verani’s website offers you the ability to narrow down your home search by the number of bedrooms, price range, the town, the style (condo or single family) and much more. Compare what your dollar can get you in one town versus another. Get to know the market.
- …Learn your credit standing. You need to know your credit rating and what, if any, issues appear on the report. You need this before you apply for a loan because you may need to request corrections if there are errors. You may need to adjust your spending habits if your credit is less than impressive. Your credit report is free from AnnualCreditReport.com, the federally regulated place to seek access to it. Though the report is free, you may have to pay a nominal fee for your credit score (a numerical scoring of your creditworthiness) depending upon state law and other factors.
- …Apply for a mortgage pre-approval or commitment letter. An early green light on a loan will put you in a good negotiation position when you find your dream home. It will also help you shop within your budget.
- …Work with people you trust, are knowledgeable and you truly like. These professionals include your Realtor, mortgage broker and home inspector just to start.
- …Buy what fits your needs for the next few years. Things may change and you may be a home seller in ten years time, but make certain what you buy can accommodate what you and your family will need in the meantime.
- …Understand that if you choose to look at foreclosed or short sale properties it will probably take longer than a typical sale to close on your home. Communications and approvals when dealing with a bank takes longer than with an anxious seller.
- …Recognize what is a priority to have in a house and what is simply a want. Separate your “wants” from your “needs” so you know where you can compromise to stay on budget.
- …Automatically jump at the first house you see. Keep an open mind and spend sufficient time looking and finding the right fit in a house and neighborhood for your needs.
- …Buy more than you can afford. Lenders will often loan you as much as your financial situation allows, but that may not be what you can comfortably afford. They are not factoring in vacations and if you eat out alot and any expensive hobbies you might have. You also never know what the future holds so go with comfortable mortgage payment and avoid stress.
- …Think you will have a huge pile of money built up in equity in a couple years. The days of skyrocketing home values may be gone for good. Expect that over a 10- year period your equity will grow, but it will not make you rich quickly. Buy a home because you need a nice place to live your life, not for a quick profit.
- …Try to time the market. Pinpointing the bottom of the market almost always happens after the market has started to turn up. How, otherwise, can you see the bottom? Focus on your personal needs, not market trends, in terms of timing your home buy.
- …Sign any type of exotic or “creative financing,” for your mortgage. Get an understandable loan that fits your needs and that won’t take you by surprise financially years from now.