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TIPS FOR FIRST TIME HOME BUYER
Buying the first home is the biggest life decision of one’s life. Just like anything that we do for the first time, there’s a learning lesson that we need to learn before we can get a good sense of the best strategies for home buying.
Few valuable tips that can help to steer you in the right direction.
- Start Saving Early
Saving enough money to buy is the most important part of buying the first home, minimizing nonessential expenses will help you to save for a house faster.
Here are the main costs to consider when saving for a home:
- Down payment: Your down payment requirement will depend on the type of mortgage you choose and the lender. A small down payment can be challenging to save. For example, a 5% down payment on a $600,000 home is $30,000.
- Closing costs: These are the fees and expenses you pay to finalize your mortgage, and they typically range from 2% to 5% of the loan amount.
- Move-in expenses: You’ll need some cash after the home purchase. Set some money aside for immediate home repairs, furnishings & upgrades.
- Decide how much can you afford
Figure out how much you can safely spend on a house before starting to shop. home affordability calculators can help with setting a price range based on your income, debt, down payment, credit score, and where you plan to live.
- Get a Mortgage Approval
Find a Mortgage Rate & Term that Works For You, Once you know what’s your budget is, you’ll want to start shopping for mortgage approval. Talk to Mortgage Agent so they can provide you with the best options available for your situation.
- Search the Market for your home
Once you’ve secured a pre-approval for a mortgage, you’ll want to start looking at homes in the area that you’re interested in. One good rule of thumb is to create two lists when you’re looking for a home: one with the absolute must-haves that you want for your house and the other with things that you’re a little more flexible on. No home is going to be absolutely perfect (at least at first), so it’s good to know the things that are deal-breakers before you start looking. This will save you time in the long run as you will be able to parse out properties that don’t have what you’re looking for.
- Hire a Professional Real Estate Agent
Use a real estate agent to help you find a home, tell him your wish list, so they can find a home as per your need. A good real estate agent will scour the market for homes that meet your needs and guide you through the negotiation and closing process. Get agent referrals from other recent home buyers. Interview at least a few agents, and request references.
- Stick to your budget
You may feel pressure to spend outside your comfort zone to beat another buyer’s offer in the current market. To avoid financial stress down the road, stick to the price range based on your budget.
Look for properties below your price limit to give some wiggle room for bidding in a competitive market.
- Get Home Inspection done before closing
Do some research on the inspector, and make sure that they are reliable and trustworthy. Be present at the entire inspection, and don’t be afraid to ask as many questions as you feel you need to; this is a huge investment, if you see something that seems like a red flag, try to get more information. This also goes for potential repairs that are needed in the house. If there are major repairs that you cannot afford to make, and the present owner won’t budge, don’t feel obligated to follow through on the sale.
While these are just a few tips of advice to consider when starting the home buying process, they’re important ones. Part of taking the plunge into becoming a homeowner is making sure that you’re doing so in a way that is financially viable and responsible.