First-time homebuyer tips: Things to know when buying your first home
Buying a home can be exciting and stressful at the same time, especially for the first-time homebuyer. Here are some tips to help you through a complicated process.
A new home is one of the largest purchases you’ll make in your life. The idea of being a homeowner can be exciting, but if you’re not careful it’s easy to get in over your head.
Here are some lessons for first-time homebuyers that will help you enter the home buying process feeling as prepared as possible:
• Start looking six months in advance of when you’d like to move — The process is not fast, and certain things, like closing, take up to a month.
• If you get frustrated with the process, think about the end result — What are the reasons you want to own a home? What do you expect to get out of being a homeowner? Is it for your family, to build equity, or because you desire the added responsibility that comes with owning a home?
• Make a list of priorities — Decide what things you are looking for in a home, so when you are looking at properties you don’t forget what matters to you the most.
• The closing date may move — Until an official date is set, don’t schedule movers or break your lease.
• Get prequalified for a mortgage before you begin looking — This will let you know how much you can afford.
• Save money for after you move into your home — There will always be unexpected expenses and maintenance costs that comes with owning a home.
• Read every document thoroughly — Your mortgage is one of the most important documents you’ll ever sign, and it’s a huge financial obligation.
• Consider monthly costs — Beyond your mortgage payment, keep in mind that there will be taxes, insurance and regular fix-up costs. Ask yourself if you can comfortably afford this.
• Bring paperwork to the initial meeting with your lender — Know what paperwork your lender requires ahead of time, and avoid delays by staying organized.
• Plan for closing costs — Many first-time homebuyers don’t account for closing costs. A general rule of thumb is to plan anywhere from 3-4% of the purchase price for closing costs, but this varies per state and region. Talk to your mortgage banker to learn more about closing costs in your area.
• Having debt, such as student loans or car loans, doesn’t mean that you can’t become a homeowner — Talk to your mortgage banker about the mortgage options that might be right for you, such as an FHA loan, which requires a lower down payment.
• Just because you are approved for a certain loan amount doesn’t necessarily mean that’s how much you should spend — Be sure to account for lifestyle choices, total monthly costs and career expectations.
JOE: It’s definitely all right to be picky in the home buying process. I mean this is something where you really should nitpick everything you possibly can. You need to look at the positives and negatives of the home that you might end up in because you’re going to live with those.
TIM: And that surprised us to. Because we did not think we had to start looking 6 months in advance. Until we went to an open house and were fortunate enough to get pushed in that direction to start looking cause it’s gonna take a month to close, a month to do this and a month to do that.
KATE: The lesson there is to give yourself as much time as you can. Cause then that makes it so you are patient throughout the process and don’t feel pressured in the end.
TIANA: It’s kind of easy to get down and out and frustrated because there’s times when you think that it’s exactly what you want and then you don’t get it. For whatever reason they don’t take your offer or they don’t even get back with you or tell you one reason or the other, one way or the other why they don’t take it. You have to remember the end result. Why are you doing this? Is it because you really want to give your kids a back yard? Is it because you really want to start earning equity in something that’s your own? Do you want to start saving money for me?
KATE: They all say like, “Oh, when you see it, you’ll know. You’ll walk in and you’ll know.” And after about 30 houses, you’re like that’s not going to happen. That is a load of crap. Like that’s not going to happen. And then it does. So it just is nice to like know that they were actually meaning that and that it will happen.