3 Lessons for First-Time Homebuyers

Are you ready to buy your first home? Although you may conduct plenty of research, know your budget and understand what you want to find in your first residence. Problems may arise along the way that could force you to rethink your homebuying plans.

So what does it take to ensure your first home purchase will be a successful one? Here are three lessons that every first-time homebuyer needs to know:

1. Purchase a home only when you’re comfortable with your decision.

Let’s face it – buying a home can be stressful, regardless of whether you’re a first-time homebuyer or have purchased multiple residences in the past. As a result, stress can be problematic, and it ultimately may lead you to buy a home before you’re ready to do so.

In a stressful homebuying situation, be sure to take a step back and explore all of the options at your disposal. By doing so, you can minimize the risk of committing to buy a home in the heat of the moment.

When in doubt, don’t be afraid to consult with family members, friends and, of course, your real estate agent. A strong support system can make a world of difference for a first-time homebuyer, and it might even help you eliminate stress throughout the homebuying process.

2. Put aside money for home improvements.

Budgeting for a home can be tricky. Ideally, you’ll want to be able to put at least a few thousand dollars down on your purchase. You’ll also want to ensure that you’re in great shape financially to handle your mortgage payments.

At the same time, you should try to put money aside for potential home improvements.

Although you’ve conducted an extensive home inspection, there are no guarantees that your home will maintain its quality for an extended period of time. As such, having a “rainy day fund” will ensure you’re ready to handle numerous home improvement projects down the line.

Adding money to your rainy day fund each month can deliver long-lasting benefits. This will allow you to be ready for any home improvement issues that may arise, along with avoiding the anxiety commonly associated with finding the finances to afford home repairs.

3. Understand the ups and downs of the real estate market.

What you pay for your home today may not be what it’s worth tomorrow. In fact, the real estate market fluctuates frequently, so you’ll want to understand that your house’s value will change in the years following your purchase.

In many cases, the value of your home will rise over the years. But in some situations, it may fall.

Remember, buying a home is a major decision and is not without risk. Even though you might expect your home’s value to skyrocket, you’ll still need to take care of your house.

Maintaining your residence will boost your chances of increasing its value, regardless of the real estate market. However, you need to be aware that a buyer’s market can change into a seller’s one at a moment’s notice, so there is always a chance that your house’s value will go up and down periodically.

Be a prepared homebuyer, and you can minimize problems as you explore the real estate market for your first residence. Thus, you’ll be better equipped to find a house that fulfills your needs and will serve you well for years to come.

Tips for First Time Home Buyers

OrganizedWhether you buy your first home later in life, or directly from college, buying your first home is a major milestone in your life.  For that reason, there are things you need to be knowledgeable about before your purchase is complete. You will want to safeguard yourself so you know that you are getting a home and a loan that you can afford. Here are a few tips from mortgage and real estate pros to help prepare you for the biggest purchase of your life.

Using an Agent

If you are a buyer, then there is no reason not to use a real estate professional. It does not cost you any more money to hire an agent. That agent will do more than find you that perfect house. You will discover that after you find a house is when you will need that agent the most.  The agent will use their expertise to present your offer to the seller and then address issues that may arise between contract and closing.

House Hunting

Remember, location, location, location. This is very important when buying a house.  Location plays a big part in determining the market value of the home. Before you start the house hunting process, make sure you know what neighborhood is a good location for you. Also, it would be good to have an idea of what style home you are looking for. Real estate moves quickly, so if you see a property that you love, you should move on it before someone else does.

Find a Loan that Works for Your

It sure can be tricky business trying decide what kind of loan is right for you.  There are many different types of loans that you should be aware of.  There is an Adjustable rate mortgage which has an interest rate that is linked to an economic index. So as the index changes your interest rate and payments may go up or down. There is also a 30 Year Fixed Rate Mortgage as well as a 15-Year Fixed Rate Mortgage. Some state and county maximum loan amount restrictions may apply.

Home Buyer Alternatives for First Timer

Saving for a first home can sometime seem like it’s a hill that too steep, but don’t worry there are assistance programs that can help. The Federal Housing Administration offers loans to people with a credit score as low as 640, low down payments and down payment assistance. There are also VA and USDA loans: Certain active members of the military and veterans as well as qualifying residents of designated rural areas can qualify for a 0% down-payment housing loans that are free of mortgage insurance fees.

How Much Do You Have to Put Down?

It really depends on what type of loan you have. If you have a conventional loan then you may have to put as much as 20% down. It is possible to put 5% down on a conventional loan if you don’t mind paying mortgage insurance.  If you go with the FHA loan you will need at least 3.5 % down.  For people who are relying on others to help with down payments, an FHA loan may be a good option. First time home buyers need to look around and know that there are a multitude of down payment assistance offers by state or local governments.

Closing cost:

There can be a lot of hidden fees in closing costs; first time home buyers should be aware of these costs.  These fees are typically included in the closing costs, including fees for commissions, appraisals, inspections, certifications and surveying.  There will also be fees for government record changes, tax and title services and transfer taxes.