Looking to buy a home for the first time and don’t know where to start?
Whether you’re getting a mortgage, choosing a real estate agent, shopping for a home, or making a down payment, we’re here to tell you what you need to know as a first-time homebuyer.
How much can you afford?
Homes aren’t cheap, so chances are you’ll need a home loan. This is also known as a mortgage, and it will cover the cost of the home for a monthly fee.
With a monthly payment, mortgages also require a hefty down payment at closing time.
So, how much can you afford? This will depend greatly on your income and a few other variables.
An online mortgage calculator will give you a ballpark figure. But for a more accurate assessment, get in touch with a lender for a mortgage pre-approval.
During this process, the bank will assess your credit history and credit score and then tell you whether you qualify for a loan, and how much you are eligible for.
A mortgage pre-approval letter also puts home sellers at ease, since they know you have the cash for a loan to back up your home offer.
Choosing the right real estate agent
When it comes to buying something, you typically purchase them yourself after some research. However, buying a home isn’t that easy.
Buying a home requires a transfer of the deed, title search, and plenty of other paperwork.
Plus, there’s the home itself. It may look like the perfect place to you, but what if there’s a plumbing issue or a termite problem?
There’s also much money involved. So before making a considerable payment, you’ll want to have a trusted real estate agent by your side to guide you through the process.
Do some research and find an agent that’s best suited for you and your purchase needs.
Make sure to interview at least a couple of agents, because once you commit, you will sign a contract barring you from working with other buyer’s agents.
The ‘perfect’ home doesn’t exist
Everyone dreams about their ideal house, and it’s hard to settle for less than that. But we must understand that real estate is about compromise.
A general rule of thumb is for buyers to prioritize these three things: price, size, and location. But statistically, you can expect to achieve only two out of those three things.
For example, you may get a great deal on a massive house in a great neighborhood, but your down payment is higher than you were hoping for.
Or maybe you found a home in the right neighborhood for the right price, but it’s a bit smaller than you imagined.
So, the trick is to find something you can live with, grow into, and renovate to your taste.
Do your homework
Once you’ve found a home you love, jumping the gun and throwing in an offer is easy. But don’t be hasty. Don’t purchase a home or make any payments without doing your due diligence.
Be sure to add contingencies. If something goes wrong, you can back out of the deal. The most common contingencies are the home inspection and financing contingency.
This allows you to request a resolution to issues if a professional home inspector finds any and to back out of the deal if your financing falls through.
Overall, a lot goes into purchasing a home, and it can seem scary when it’s your first time.
Familiarize yourself with the basics of the process and find a real estate agent that can guide you through the process.