13 First-Time Buyer Tips
1. Start Saving Early
We talk about this frequently, it is better to have more money than you need for closing costs and downpayment than to not have enough. Having the money needed can cushion your pocket and elimate the need for a “gift” from a relative. Start by deciding how much down payment and how much house you would like and start saving, you can never start too soon!
2. Work on Your Credit
Much like savings, having a healthy credit score and report can do you no harm. Access your credit report and see how you can improve on it and start chipping away. A healthy report makes it easier for you to qualify for a loan and can help secure a better rate for you.
3. Try Not to Finance Anything Before Buying a Home
Financing can impact your credit score, especially if it is a new account. In addition, if it negatively impacts your credit severely, you could lose out on interest rate, terms or even the loan you thought you had before you have it. In the case of the biggest purchase of your life, it’s best not to risk it by opening a new account.
4. Do You Know How Much Home You Can Afford?
Start by deciding how much home you can afford. This could start by looking at your monthly payments and income for a month and seeing what monthly payment you would feel comfortable making. It also helps to scope out the market and get an idea of what homes are going for in your desired area. A Loan Officer will be able to collect that data from you and be able to give you the maximum mortgage you could qualify for, that would leave you with deciding what you feel comfortable with for your lifestyle.
5. Learn About Mortgage Options
Research the different mortgage options that exist. VA, FHA, Conventional, which loans seem like they could be a good fit for you? Sitting with a Loan Officer and discussing what these options could be available and entail for you will help you decide which one you would prefer.
6. Discuss First-Time Home Buyer Programs
There are first time home buyer programs out. They can help you save money and put it back into your home or pocket. A loan officer can help you see if you qualify for them. In addition, some cities have grants available for first-time home buyers and could be worth further investigation.
7. Get Your Paperwork Together
When trying to secure a mortgage, it will be required that you document your income, assets, and identity. To do so, you will need to supply 30 days worth of paystubs, W2’s and tax returns from the last 2 years, a legal state ID, and 2 months of recent official bank statements. Some additional documentation could be required depending on loan and situation. However, having those documents ready will speed up your ability to secure a loan.
8. Be Aware of Other Expenses.
Don’t forget about the other items you’ll be paying for when you buy a house. This can include home inspections, appraisal fee, and other fees charged by the lender and title company. Once you own that home, you’ll need to think about property taxes, utilities, maintenance, and any renovations or repairs you might want to do.
9. Are You Financially Ready To Buy?
Considering everything we’ve already talked about; do you think you’re financially ready to buy a house? Here are a few hard questions to ask yourself:
Are my finances in order? (How is my credit, do I have a lot of debt? Do I make enough to support a mortgage on a home?)
Have I saved enough money to buy a house?
Is my income reliable?
Can I qualify for a mortgage comfortably?
10. Get Pre-approved
Nearly a requirement for home shopping now. Getting pre-approved means that you’ve already given your lender all the required documents and they are willing to lend you money based off all of it. This is great because you will know what price range you can shop in, how much you can offer, and that you’re serious about purchasing a home.
11. Find the Right Real Estate Agent for You
There are a lot of Real Estate Agents, just like there are a lot of lenders. It’s important that you find one that is a good fit for you and your needs. You can find agents through real estate apps, friends, and family. If you already have a lender who you like, they can likely give you a recommendation of several who they also work with.
12. Utilize Open Houses and Virtual Tours
You can save you and your agent time by doing either of these. Virtual tours allow you the opportunity to see the house in 3-D without having to set up a showing or driving their. This way you know if you do want a showing, it has potential.
13. Save Physical Copies of Your Paperwork
When you purchase your home, you will sign more paperwork than you can dream of. Keeping copies of all of those documents can help you in the future if you ever need to refer to them. Saving them as an electronic copy would also help. Yet, having both ensures that you will be able to look back on it should you ever need to.