5 Tips for First-Time Home Buyers
Nov 29, 2006 12:00AM
With the housing market slowing down and home prices becoming (relatively) more reasonable, now is a good time to consider buying a home. However, the process of actually buying a home can seem a bit overwhelming, especially if you are a first-time home buyer.
Doing a little research, finding a quality loan officer and asking good questions will help any home buyer feel more confident in the whole home buying process. Here are five tips for first-time homebuyers to make the process less daunting.
1. Save Just A Little Bit More.
Of course it’s important to save money for the down payment and closing costs. But there’s more to buying a home than figuring out if you can pay a monthly mortgage payment. Your costs may be similar to renting, but now you must be prepared to maintain a home, too.
Weekly shopping trips to your local big box home store to purchase everything from decorating items to a lawn mower can add up quickly. That’s why many mortgage lenders recommend that first-time homebuyers have at least three to six months of additional savings.
If you also need to pair down your belongings, consider going proactive by hosting a garage sale.
2. Check Your Credit.
An individual’s credit score will have a significant impact on their mortgage loan approval and interest rate. A good first step in the home-financing process is to check your credit history. You can request a free credit report from any of the three credit reporting bureaus: Equifax, TransUnion or Experian. Carefully review your report and contact the credit reporting bureaus to correct any misinformation.
3. Get Pre-approved.
Before you start working with a real estate agent, consider contacting a mortgage lender to obtain a pre-approval credit decision. A loan officer will review your financial status, including your income, cash flow and credit score, to help you determine the maximum monthly housing payment for which you may be able to qualify, and, if qualified, “pre-approve” your mortgage before you’ve found a home.
Armed with a credit pre-approval, you can start searching with a much better idea of the price range you should be looking in, and in turn save time as you’ll know the right homes to focus on. In addition, a pre-approval often makes your offer more appealing to sellers.
4. Don’t Be Afraid to Ask Questions.
Once you’ve found your new home, the mortgage lender will help you through the details of the loan process. Your mortgage loan officer can also be a valuable source of information, so be sure to take advantage of his or her expertise.
Throughout the process, read all loan documents carefully, ask questions, and involve an attorney, if necessary. Click here for common Home Buying terms .
5. Get a Detailed Inspection.
Before you commit to purchasing a home, don’t forget to hire a licensed home inspector to conduct a thorough assessment of the property. An inspector can alert you to any major problems with the home, and/or help you understand potential short-term and long-term home maintenance issues.
Buying a home for the first time can seem like you’re riding on a roller coaster. But, by doing your homework, asking lots of questions, and taking your time, you can stay in control and discover a great sense of accomplishment in buying your first home.
Courtesy of ARA Content