14 Tips For First time home buyers
A successful homebuying process takes a lot of experience and hard work in the right direction. Adding those small steps to build your own house can take you miles however, taking a single wrong step will put you in endless troubles. So, it is very important that you align all your steps in the right direction, right from start to the finish.
In order to help you have a great experience as a first time home buyer, here are some quick tips to follow and best navigate through the process.
You can categorize your preparation under four sub categories-
- Mortgage selection
- Home searching
- Home purchasing
Make sure to begin your process from the first step and move ahead in a chronological order to best flow in the process.
14 tips to ease your first time home buying process
Here is a list of 14 effective tips to help you sail through your home buying process as a first time home buyer-
- Start with savings as early as possible
There are multiple costs associated with the process of buying a home including costs like-down payment, closing costs, move-in expenses, etc. Make sure to start saving for all such costs as early as possible to have quite an accumulated amount for your home buying. Try investing a major amount in paying the down payment to avoid having a clingy loan system, by your side.
- Take a decision on your affordability
This applies true for all kinds of home buyers. Perform a critical analysis and figure out your affordability standards. This will keep you on a safer side while spending on buying your house. There are multiple home affordability calculators, online that can help you through this process on the basis of your income, debt undertaken, down payment, credit score and the geographical location.
- Strengthen your credit score
The better is your credit score, better are you chances of qualifying for a mortgage loan and getting the better interest rates from your lenders. To strengthen your credit scores, you should pay your bills on time, keep a record of your credit reports, keep your current credit cards active and not to forget keep a track of your credit score all the time.
- Don’t forgo your chance to explore
There are several mortgage varieties available in the market. Each one has its own varying down payments, interest rates and eligibility requirements. The main categories of mortgage loans include- Conventional mortgages, FHA loans (insured by the Federal Housing Administration), USDA loans (guaranteed by the U.S. Department of Agriculture) and the VA loans (guaranteed under the Department of Veterans Affairs). Explore around and the pick the best suitable loan system for you. Also, choose a loan term that best fits you. You can opt between 30-year fixed-rate mortgage, offering 30 years loan term with non-flexible interest rate and the 15-year loan with lower interest rate in comparison to 30-year mortgage with larger monthly payment.
- Take benefit from the first-time home buyer assistance programs
Most of the state and city regulation bodies offer special assistance programs for the first time home buyer. Under this, you can get a low-interest-rate mortgage, down payment and closing cost assistance.
- Compare to choose
As per the Consumer Financial Protection Bureau, home buyers should ask for loan estimates of similar mortgage loans types from different lenders. This is the best way to compare the overall costs, offered interest rates and the associated fees to find the best fit for you.
- Preapproval letter helps
Under the mortgage preapproval, your lender will offer you a certain amount of loan under their specific terms. With this preapproval letter, buyers are considered more serious and it also helps them bargain for the best rates with their home sellers or real estate agents.
- Choose your real estate agent very carefully
This will be a very crucial step in first time home buying. Catching hold of a good real estate agent will not just help but also guide you throughout the home buying and loan closure process in the best way. However, getting trapped with the wrong ones will make you fall in a soup. Make sure to interview your shortlisted agents or ask for references before finalizing your real estate agent.
- Geographical location matters
It is equally important to pick your house and neighbourhood, rightly. Consider multiple factors- right from the house type, geographical location, privacy, lifestyle, ready-to-move-in or under construction, work commutation, home valuation 10 years down the line, etc. before finalizing your house.
- Don’t over budget
It is the tendency of the lenders to offer higher loan amount than your comfortable affordability range. Don’t get into that unwanted pressure and spend out of your comfort zone. This will only lead to financial stress. So, better stick to your budget always. Let your agent know your price range in advance and consider properties below your range for better comfortability.
- Go for home tours
Right from online 3D home tours to offline tours, make the most out of it. Initially opt for online tours to narrow down your list and make the final offline tours to consider and validate factors like- carpet smells or any other odours, surrounding noise, overall condition of the house in terms of both intrinsic and extrinsic factors.
- Get a paid home inspection done
Don’t hesitate to hire a paid home inspection agent for a thorough assessment of your property. This should include- the structure and the mechanical systems of the house. This will help you make better and informed decision while buying your house.
Believe it or not, but a lot can be saved just by bargaining and negotiating on the final amount. You can bargain based on factors like- payment for repairs, geographical location, etc. Understand what is the current market price and strategize your bargain, accordingly.
- Get a home insurance
Getting a home insurance for your house will help cover the most necessary costs like- repair, replacements, damage covers, etc. Don’t hesitate on this part.