Tips for First Time Home Buyers
Buying a home might just be the biggest purchase of your lifetime. For those buying their first home, the journey can be both exciting and stressful. Even with an experienced realtor by your side, you can be caught off guard by unexpected expenses and unfamiliar lingo.
The team at Chief Knows Ft Campbell is here to help ease your home buying concerns with these first-time home buyer tips. These tidbits will help you avoid some of the most common first time home buying mistakes and coast into the home buying process with ease. Whether it is finding the best location or financing the purchase, there are inherent challenges that go beyond basic curb appeal.
Think big picture
Just because you can afford a mortgage it doesn’t necessarily mean that you can afford to own a home. Consider things like taxes, maintenance fees, higher utilities, property insurance and homeowners insurance dues. These are things that first-time buyers tend to overlook when shopping for a new home. You may be able to afford it now, but the key is to think long term and calculate if you can afford these increased costs later down the road.
Put the horse before the cart
If you are searching for a home without getting prequalified for a loan then you are putting the cart before the horse. Unless you can pay cash for your first house, the home search should begin with mortgage prequalification. While there can be some fear around the prequalification process, it is important to find out if you qualify and what you qualify for before you choosing a price range out of the blue. Exposing your financial situation to a lender can be stressful but it will save everyone time in the long run and ensure that your decision is made based on your finances instead of your emotions.
Get professional help
We aren’t referring to a psychiatrist although the process can certainly make you feel like you need to see a therapist. If you are buying your first home, make sure you find a reputable real estate agent, a good broker. or loan officer and possibly even an attorney. You want to have the right people on your team who can interact directly with the listing agent on your behalf. In addition, a listing agent will only show you their own listings. A buyer’s agent is on the side of the buyer and will help you find homes based on predetermined criteria. Ask friends and family for referrals.
Save your savings
Chances are you’ve been stashing away your bonuses, tax refunds and vacation pay. While it may sound like a good idea to use most of your savings toward a down payment and closing costs, think twice. Coming up with a larger down payment will keep you from paying mortgage insurance on a conventional mortgage but it will drain your savings. Homeowners especially need to have a rainy-day fund for unexpected expenses. The larger down payment means you risk living on the edge. Often it is worth it to simply pay the mortgage insurance.
Curb the temptation to take out new loans
You prequalified for a loan and you found the house of your dreams. The contract is signed and it’s just 30 days until closing. The temptation is real: new furniture, appliances maybe even a new car. The worst thing you can do right now is to celebrate by taking out another loan. Although It feels like you are in the home stretch, lenders will pull your credit report right before closing to ensure that your credit is still in good shape. A new loan can literally jeopardize the upcoming closing.
Buying a first home is not without its share of potential mistakes and pitfalls. Being aware of those possible issues in advance will help protect you from costly mistakes and will allow you to shop for your first home with confidence.