Tradition Home Group has compiled a list of things first time home buyers should consider when starting the buying process. We hope these handy tips will assist you in demystifying the process and result in a positive experience while purchasing your first home. The first thing to determine is what your long-term goals are and how homeownership will fit into those plans. Many first time buyers are simply wanting to turn wasted rent payments into mortgage payments and see owning a home as a form of independence. There are five questions you can ask yourself when narrowing down your homeownership goals and point yourself in the right direction.
1. What type of home will best suit the needs of your family?
- Traditional single-family home
- Townhouse
- Condo
- Multi-family dwelling with 2-4 units
- Fixer-upper
2. What features are you looking for in your ideal home?
- Neighborhood and size
- Neighborhood amenities
- School district
- Exterior features of the home
- Interior layout of the home
3. How much of a mortgage do you actually qualify for?
Lenders can help you determine this by analyzing outstanding debt, monthly income and how long you have been at your current job .
4. How much can you actually afford?
It’s important to consider the total cost of the home not just the monthly payment . Other costs to consider are down payment, property taxes, homeowner’s insurance, HOA dues, closing costs and home maintenance/improvement costs
5. What professional real estate agent will you choose to guide you through the process?
Your agent will help you locate homes in your price range and that meet your long-term goals Your agent will assist you through negotiating an offer, getting a loan and completing all of the necessary paperwork . Choose a real estate agent with a stellar reputation and one that you trust as their expertise will help protect you through the process.
Once you have answered the above questions, it is time to start the buying process. Taking the plunge will be a fun but chaotic time, but if you are prepared and have good representation, it can be an enjoyable process. Start with finding a home by using your agent, scouring listings online and driving through neighborhoods that interest you. Consult with family and friends to see if they know of any homes for sale that might fit your needs.
Next, there are a wide variety of financing options available to first-time home buyers so do some research and secure financing. It pays off in the end to shop around for the best available mortgage interest rate, this is something your real estate agent can assist you with as they know the most reputable mortgage companies in the industry.
Once you have found a home, your agent will help you decide how much money to offer and if you want to ask for any conditions. Your agent will present the offer for you and the negotiation process will begin. When you have come to an agreement, you will make a good faith deposit and transition into escrow. Escrow (usually 30 days), is a short period of time where the seller will take the house off of the market knowing your intention to purchase it assuming there are no serious problems detected at inspection. A trained professional will be hired to inspect the property and assess the overall condition of your home. If there are no major problems, your agent will then set up closing. During this time, you will sign a lot of paperwork, have the home appraised, do a title search among other things. Your trusted lender and real estate agent will be with you during this last phase.
Once you have moved in and celebrated your new purchase and it is starting to feel like home, you will want to establish an emergency fund. With homeownership comes unexpected expenses, so you will want to be prepared for those. It is imperative that you perform routine maintenance and keep your property in tip-top shape keeping unexpected expenses at a minimum.
