Advice for First Time Buyers
Buying a home for the first time can be a very exhausting and frustrating experience. As a first time home buyer you should compile a list of information and tasks that may ease these frustrations. This list should include information on your income, credit reports, a list of mortgage options, and more. Below are simple steps that will help you get to know more about real estate and what it takes to buy a home.
Step One: How much can your wallet handle?
The first thing potential buyers should do is figure out how much you can afford. Buyers should really take a good look at your financial situation and determine if this is the right time for you to buy. The best time to buy is now, due to it being a buyer’s market. This means there are more sellers than buyers for real estate, especially with prices and mortgage rates being at an all time low. If you can afford to spend, you should calculate your monthly income and debt, and check your credit report and FICO score. Also, figure out your down payment. 20% is an ideal amount for a down payment.
Step Two: Documentation is key.
Gathering income documentation is the next big step for buying a home. You should file all of your tax records, W-2 forms, and most current pay slip together. Finally, choose a reputable mortgage broker.
Step Three: Choose a mortgage that fits.
After the loan pre-qualification process, the lenders and the mortgage brokers will give options that fit your financial scenario. Choose a mortgage that fits for you. Do you need a mortgage that’s fixed? Or do you need a conventional mortgage? 15 years or 30 years? The choice is entirely up to you. You can also speak with a lender and mortgage broker. Getting multiple opinions will help narrow down your choice. Once you have gotten a grasp of terms that work for you, you can now zero-in on the purchase price based on the payment that you’re comfortable with and what works with the qualifying lender.
Step Four: You’re almost home, pun intended.
Try to find a good reputable real estate agent, especially one that specializes in first time home buyers. Ask a friend or a neighbor for references. More than likely, they will have a business card or refrigerator magnet of their real estate agent. Figure out where exactly you would like to live. The best thing you can do is research your target neighborhoods. Would you like an open community or would you prefer a gated one? Would you like to live close to the downtown area or more toward the suburbs? These are question you need to answer that will help guide your realtor to your ideal home. You should also search online about crime rates, home to work distances, schools, hospitals, etc.