It is a thrilling venture to finally look into buying your own home. Most especially if you’ve been in the renting lifestyle. You have to be careful though and make sure that you’re not going to hurt you finances when you decide to buy your home.
It is overwhelming going into the market to look for your dream home without proper guidance on what to do or what to look out for if you’re a first time home buyer.
As a first time home buyer here are 10 tips that will help you in your home buying adventure.
1. Have an Emergency Fund Savings Account.
To enjoy the new home you will move into, be sure to clear any outstanding debts that may be a huddle in your plans.
Having your own home means that all the maintenance cost will be yours to handle. This is different from when you rented before, because it was the caretakers’ responsibility to ensure your home was in good health.
2. Determine How much you can Spend on the Home Buying.
It doesn’t matter how beautiful the house is or how much you love the laundry room, you have to work within your budget. If you work over the budget your blessing home will be a burden.
This is because you might not be able to handle the repairs that come with owning the home. Have a budget of what you will spend to buy the home that will not leave you broke.
3. Save a Down Payment
There are many loop holes that may trap you as a first time home buyer. These include programs that offer single-digit down payments that are very luring and seem cheap but in the long run are very expensive.
It is wise for you to save at least 20% or more of the down payment. Consider the benefits and drawbacks before selecting your option of down payment.
4. Have the Closing Cost Saved Up
On average the close cost for the sale of a home usually is about 3-4% of the sale price of your home. You have to work hard to meet to have the closing cost and down payment saved up to have that dream home.
There are various cost you will enquire while paying for the closing cost. Some of the costs include;
First the application fee which is the cost of the lender to process your application fee. Second is the appraisal fee paid to affirm the market value of your home.
Third is the attorney fee is paid to the attorney to check all documents before closing of the deal. Your agent could also act as your attorney if they’re well qualified for it.Lastly is the private mortgage insurance. This payment applies if you’re making a down payment that 20% less than the home’s purchase price.
5. Have a Pre-approved Loan Letter from your Bank.
To separate yourself from the other buyers in the market, have a loan approval letter.
Being approved for a mortgage shows you as a serious buyer and improves your chances of getting the home. The mortgage is to help you in payment of your home as you make payments to the bank.
6. Hire the Right Real Estate Agent.
You may need help in your home buying adventure. The agent should be a professional, highly skilled and easy to work with. You need to get a person who is of integrity and knows the area of interest well.
Get an agent that has the best negotiating skills who will help you on closing the deal. A real estate agent helps guide you through home buying experience.
An agent helps with legal requirements, easily made mistakes, negotiations and best deals. This will make light your burden of home buying and you will learn from them.
7. Select the Most Suitable House and Neighborhood.
A great strategy that you should use while looking to buy a home is to find the most affordable house in the best neighborhood. You’ll have to spend within budget buying the house which gives you room to add value to your house.
You could do random drives through the neighborhood and assess the traffic, noise, ambiance, and get to know the security status. Use your agent also to get to know more of the neighborhood.
8. Make a point of Attending Open Houses
Open houses gives you a great opportunity to see different homes in your selected area of interest. Ask valid questions about the various houses you visit. As about when the house was built, the repairs done, systems in place the house.
Attending open houses helps you know more about the property. If the property is of interest to you, schedule a second visit and get to know more about the house.
9. With Help of your Agent, Make a Competitive Offer.
Since you are a first time buyer, the help of an agent is most suitable. You aren’t very conversant with the market, thus your agent will help close the deal. Pitching the buying amount of the house within your budget from all selected ones.
10. Make Preparations for Closing the Deal.
This is the last and final step to your home buying venture. Make sure you consult with your agent on all documentation before signing anything.
Ask questions on any details you don’t understand to your agent. Counter-check everything before signing the documents that transfer the house to your name.
As a First Time Home Buyer, your Budget is your Boss.
Always work within your budget, don’t let the excitement and extravagance of the home buying adventure trap in you in debt. Work with what you have or if you really have to, wait till you save up enough for what you desire.
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