10 Tips For First-Time Home Buyers
If you are buying a home for the first time, here are 10 strategies to make that first purchase a great experience!
- CREDIT: poor credit will make you a bigger risk in a lender's eyes-- and more risk means higher interest rates and steeper monthly mortgage costs. Make a point of paying credit cards bills, auto loans, rent and other payments on time, all the time, and in full.
- CONSIDER TAXES: when you buy a home, mortgage interest and property taxes are generally deductible from income taxes. This means that while monthly housing costs may be higher when you own than when you rent, what you save in taxes could make up some or all of the difference.
- KNOW THE REALTOR'S ROLE: a Realtor is at the center of most property transactions. It is important for you to know what a Realtor does, who the Realtor represents, and how the brokerage system works.
- CONSIDER WHAT LOCATIONS WILL WORK BEST FOR YOU: look at your needs, the needs of household members and your preferences in terms of commuting, shopping, recreation, and other factors that might be important to you.
- PLAN ON GETTING A HOME INSPECTION: a professional home inspection can help you understand the condition of the property and the repair bills you are likely to face in the forseeable future.
- LOOK INTO THE MORTGAGE PROCESS ASAP: get pre-approved so that you generally know how much you can borrow, what you can afford, and to assure a seller that you are a serious buyer with the ability to be approved for a mortgage.
- SAVE: you will need money for a down payment, closing costs, moving costs and other expenses. Put off trips and luxury purchases until after you are moved into and settled in your new home.
- EXAMINE VARIOUS FINANCING OPTIONS: consider FHA, VA and state-backed loan programs, which might require little money down and have more liberal qualification standards. Another good reason to get pre-qualified early in the process.
- LOOK FOR GIFTS & GRANTS: according to the National Association of Realtors, 22% of all first-time home buyers receive gifts from relatives and friends.
- START NOW, TAKE YOUR TIME, ASK AS MANY QUESTIONS AS YOU LIKE: your Realtor should happily answer and and all questions you might have, as should your mortgage lender. There really is no such thing as a stupid questions!