If you’ve never bought a home, venturing into the real estate world may seem daunting. But thankfully, if you do the proper research and get the right guidance, it can be a smooth process. Here are 6 tips for you, first-time home buyer, as you set out to settle into a forever home.
Explore down payment options.
The typical amount for a down payment is 20% of the loan amount. However, some lenders offer a percentage as low as 3% down. In that case, interest rates and other costs may be higher, so it’s best to do your research and find which lender is best for your situation and what down payment amount is best for your budget.
Take care of your credit.
Since your credit score is such a big part of getting a good mortgage, check your credit to make sure it’s accurate. Dispute anything that isn’t correct and find ways to improve your score before you apply for a mortgage. If you’re planning on getting a car loan or another credit card, wait to open new credit activity until after you’ve gotten your mortgage. New activity can temporarily lower your score which will affect your mortgage. As best you can, make sure you look good on paper when your lender checks on you.
Make a detailed home budget.
When you’re preparing to buy a home, it’s a good idea to make a comprehensive budget for the purchase. Think about what kind of home is best for your needs (single family home, condo, townhouse) and use a home affordability calculator to determine what you can afford. In the budget, include not only your mortgage and down payment costs, but closing costs, expenses you’ll have after moving in, and homeowner insurance prices. Additionally, research and budget federal, state, and local assistance programs for first-time homeowners. Making a budget will help you know what’s coming and be prepared for every cost.
Compare mortgage rates and get a pre-approval letter.
Just like you’d shop around for the best car insurance company or the best cell phone provider, you should shop around for the best mortgage lender. Compare rates and terms, and get a pre-approval letter from the lender you choose. Pre-approval letters tell you how much a lender is willing to lend, and they give you an edge over other buyers who didn’t get a letter when you go to make an offer on a house.
Avoid multiple offer situations.
As I discussed in my blog, Winning Strategies for Multiple Offer Situations, multiple offer situations can be a tricky place for buyers. As a buyer, it’s best to avoid these situations by going for homes that have been on the market for several weeks and look for homes that are priced lower than your budget so you have negotiation room. If you really love a home that has other offers, you still have options. But if possible, avoid those situations altogether.
Choose the right agent.
One of the most important parts of the home buying process is choosing the right agent for you. You want to find someone who’s friendly, experienced, and knowledgeable about the area. It’s an agent’s job to make sure you’re informed and get the best home for the best deal possible. Of course, as an agent with over 20 years experience and over 10 years knowledge of the Lakeland area, I would love to represent you in your first home buying experience! I’m ready to help with anything real estate!
Buying a home for the first time can be a scary prospect, but I hope these tips gave you a good starting point in moving toward your forever home. As always, contact me through email, through phone at (863) 450-8847, through social media, or through my mobile app for any real estate need.