Buying Your First Home is Easy with these 8 Simple Tips
In today’s current environment, buying a home is difficult for everyone. For first-time buyers, it’s even tougher. They often come in feeling overwhelmed, nervous, and (all too often) desperate to buy.
But knowledge is usually the best solution to this problem. By knowing what to do when buying your first home, you’ll see that purchasing your first home is easy. Purchasing is certainly not something that should be scary or intimidating, and these tips can make it easier and less stressful.
Note: This is part of a two-part series on first-time buyers. Read Part 1 here.
What to Do When Buying Your First Home: 8 Simply Tips
Establish Your Housing Budget
It’s one of the most important first steps you can take: establishing your budget. When purchasing a house, you need to know how much you can afford and what payment your budget can handle. When you have this information, you’ll be able to purchase a home with a mortgage that fits your needs.
Don’t be casual about this step. Take your time, go over your monthly finances, and be highly meticulous about your establishing your budget.
Make a Needs and Wants List
After you know your household budget, you can begin to dream about your first home. To get the best results, it helps to create a needs and a wants list, which will help focus your job search.
Start with your needs. Needs should include everything you must have from a house, which usually means bedroom count, location, bathroom count, school district, and other factors. A good way to think about this is to consider it as all items you can’t easily change. (For example, you can change the paint color or kitchen layout, you can’t easily change the bedroom count.)
Next is your wants, which are simply characteristics or features of the home that you desire but could live without. Garage space, features like a pool or hot tub, and backyard size are usually wants, not needs.
Check Your Credit and Make Appropriate Changes
Your lending agent will certainly check your credit, so this might seem like a redundant step. But it helps to know before you visit their office. Checking your credit through the various bureaus is easy, and the information will give you an indication on your loan potential.
A top advantage for checking your credit before visiting a lender is that you have the chance to make appropriate changes. If it’s low, you can check for inaccuracies, which can then be fixed. If it’s low because of past credit issues, you can make adjustments to your budget and hopefully fix the problem before visiting with a lending agent.
Research Available First-Time Homebuyer Advantages
Homeownership is seen as an important pillar for financial prosperity. It’s believed that owning a home is important for both short-term stability and long-term financial strength. With that in mind, many state and local governments, as well as the federal government, offer benefits and assistance to first-time buyers.
These benefits can include downpayment assistance, additional loans, and even grants that make your purchase more affordable. And you don’t even have to be a literal first-time buyer to use many of these programs, as they are often available to people who have not owned a home in three years.
Get Pre-Approved for a Mortgage
Visiting with a lender before viewing homes in person is essential. Sellers and real estate agents want to know they are working with someone who can afford the payments, so they often require pre-qualification or pre-approval letters from all buyers. If you want to have a private showing, you need to get pre-qualified!
Pre-qualification is usually simple and straightforward, and can often be completed over the phone. This simple, quick step is important when you want to start the home-shopping process.
Tell Your Lending Agent EVERYTHING
It’s important that you are upfront and honest with your lending agent. If there are any issues with your credit or your finances, those problems will eventually come to light, so it’s in your best interest to be honest and forthright. There’s nothing to be embarrassed or ashamed about when it comes to credit problems; we all face them at one point or another, so tell your lending agent if you have missed payments, past bankruptcies, student-loan deferment, or any other problems on your credit history.
It’s also important to be honest about your income. As an example, if you received bonus income this year but don’t expect a large bonus next year, disclose this information. By being honest, you’ll not only have faster mortgage approval, but you’ll also increase your chances of successful homeownership.
Make Sure Buyer’s Agent and Lender on Same Page
The two most important people during your home purchase are your real estate agent and lending agent. It’s vital that they are on the same page and working towards the same goals.
The buyer’s agent and lending agent need to be in communication when a house is found, when offers are made, if an issue occurs with financing, or a variety of other situations that occur during a purchase process.
Increase Deposit, Make Other Steps to Enhance Competitiveness of Offer
In a competitive market like San Diego and numerous other areas across the country, buyers are having a hard time making a purchase. There are simply too many buyers and not enough inventory, so prices are beginning to skyrocket.
As a first-time buyer, you need to be aware that there is high competition and you should be prepared to take steps that increase your competitiveness. Increasing the initial deposit, or “earnest money,” may help, as it shows that you are serious about the offer and committed to making the purchase. Even a smaller total offer can be more attractive if you add a larger deposit.
Excellent Service for First-Time Buyers
We love serving all real estate purchaser, and we are particularly proud to help first-time buyers. There’s just something special about making that first purchase, and we’d love to help in any way possible.
Give us a call and let us help secure financing for your first home!