Tips for First-Time Homebuyers
You have decided to take that giant step into home ownership. It is a worthy goal
that involves some planning and discipline on your part. Here are a few tips that will
make the buying process a little bit smoother and stress-free.
Tip #1: Check Your Credit
Your credit score and the information contained within your credit report will
determine how much of a home loan you will qualify for and if you can qualify. You
can obtain a free report from each of the three main credit-reporting agencies. Look
these reports over carefully and dispute any errors that they may contain. One thing
you should never do when preparing to obtain a home loan is to open a new line of
credit, like applying for a new credit card or purchasing a new car on credit.
Tip #2: Get Preapproved
Getting preapproved will tell you exactly how much home you can afford. With a
preapproval letter from a mortgage lender, any purchase offer you make will be
considered a stronger offer. Both the sellers and the real estate agents involved will
know that you can complete the purchase and do so in a timely manner.
Be aware that there is a major difference between a preapproval and a
prequalification. A prequalification is only an estimate of the size of loan that you
could qualify for. It is based on informal information. While a preapproval is still not
a loan guarantee, it is a stronger sign of what you can afford.
Tip #3: Explore Your Neighborhoods of Interest
Open houses provide you with an opportunity to visit and view homes that are for
sale in neighborhoods that you would like to live in. Never rush into buying the first
home that you come across. Seeing and comparing the homes that are on the market
will give you the information that you need to determine whether a home is a good,
or reasonably good, deal. It will also keep you from making an offer on over-priced
Another possibly important consideration for your new home is off-street parking.
Having a garage, or off-street parking, is important when the time may come to sell
the home. Even if you are looking for a downtown condo, off-street or covered
parking will increase the value of any property.
Once you have a better idea of the types of homes and neighborhoods that appeal to
you, find a good real estate agent to work with. This will be one of the few times in
life that you can hire an expert and not have to take any money out of your own
pocket to pay for their help. Sellers pay commissions to realtors, not buyers!
Tip #4: Adhere to Your Budget
Don’t over-spend on the home. It’s easy to discount the fact that life happens and
financial surprises will crop up at the most inconvenient times. Don’t stretch
yourself too thin financially. Also remember that there are other costs involved in a
home purchase; things like insurance costs, appraisal fees, and closing costs. All
these things must be planned for and added to the final cost of the home.
Tip #5: Never Skip a Home Inspection
It may look great and it may seem perfect but a thorough home inspection is still a
necessity. You can’t determine whether every structural or mechanical component
is in good condition if you don’t know what you are looking at. A qualified home
inspector knows and understands what to look for. If possible, be present when the
inspection is done so that you can ask questions immediately if an issue comes up. If
you can’t be present, be sure to carefully review the inspection report and ask about
any concerns you may have. This is another area that a good real estate agent can
help you with.
In the End
Purchasing your first home should not be overwhelming. Being prepared will enable
the process to be accomplished quickly and smoothly. These tips will increase your
chances of a successful and stress-free first home purchase.