Buying a first home is often fraught with uncertainty and stress. The home buying process may be made easier and less stressful with these tips for first time home buyers.
1. Don’t Stretch Your Budget:
Figure out how much you are able to comfortably afford before looking for a home. A $1000 a month rent payment does not mean you are able to afford the same mortgage payment. Owning a home has increased costs over renting. Taxes, insurance and unforeseen maintenance costs will add up to higher expenses. Consider all of these factors when deciding on a home budget. A mortgage calculator will help determine these costs.
2. Find A Real Estate Broker:
Find a reputable real estate broker. Real estate brokers will help a prospective buyer find the perfect home. Good real estate agents know the local marketplace and whether the house is for sale at a good price. They will be aware of what is available and how much is a fair price for the amenities within the home. Seasoned real estate brokers will help walk the home buyer through the negotiating process to ensure the best possible purchase price.
3. Obtain Mortgage Pre-approval:
Have financing in place before stepping foot into any home. Pre-approval is different from being pre-qualified. Pre-approval means financing up to a set amount is guaranteed by the lender. Pre-approval letters from a mortgage company offer the buyer an advantage in the negotiating point of the home purchase. Potential buyers will be able to show they are serious and have funding in place. This allows them leverage over another potential buyer who does not have mortgage pre-approval.
4. Have A Home Inspection:
Home inspections are a vital part of purchasing a property. A good inspector will look for a variety of issues to help determine if there are any problems within the home. Issues found by an inspector will allow the buyer the ability to renegotiate price. Buyers may walk away from the house if severe issues are discovered and they do not feel capable of dealing with the problems, and the seller isn’t willing to fix problems found by the home inspection.
5. Remember Closing Costs:
First time home buyers need to remember closing costs. These fees typically range from two to four percent of the total loan amount. Closing costs depend on how many points the lender is charging for the loan. Buyers can sometimes negotiate closing costs with the seller paying some or all of these fees. Use a closing cost calculator to help determine your closing costs.
6. Save Some Money for Home Repairs:
Sure, putting a big down payment on your new home is a good thing. But have you thought about home repairs? It is not smart to put all of your money into your down payment, or to use the rest to make improvements. Surprises abound for first-time home buyers who may not be aware of all the ways their new home can swallow their money. Gone are the days when many homeowners could dip into their equity to replace a roof or septic system. Be proactive and keep some savings aside for unexpected home repairs, even if the inspection came up clean.
Talk to us about buying your first home. We are experienced in all these areas and can help you make the first home buying experience enjoyable, not a nightmare.
If you are anywhere near the thought of buying a house, you should do it right now. Today.
Rates are crazy low, home prices are crazy low, and supply far exceeds demand. There is no better time. And we’re not the only one saying this.
Remember John R. Talbott? He wrote “The Coming Crash in the Housing Market” (2003) and “Sell Now! The End of the Housing Bubble” (2006). Well, guess what he’s saying now? Buy, buy, buy! Or refinance, refinance, refinance!
Talbott makes some great points about how current home prices compare to construction and replacement costs and how incomes are currently comparing to rent prices. If you’re on the fence about buying or refinancing, reading the complete article may help you make up your mind.
Then call one of our Broker Experts, who can tell you how all this applies to your specific situation.
The purchase of a home is, in the majority of cases, the single most expensive and complicated transaction a person will ever experience. On top of that, people typically only have the experience one, two, or three times during a lifetime, so they never get accustomed to the process. Also, requirements for a real estate transaction changes over the years. Because of this, there are many benefits of working with a buyer’s agent who can successfully guide, advise, and navigate the path to home ownership.
A buyer’s agent utilizes their knowledge of the real estate market to help their client acquire their home. By using years of first-hand experience in the home buying trenches, the buyer’s agent offers advice on fair market value, how to best negotiate all the terms, and how to complete all of the necessary documentation. This experience is extremely valuable given all the possible variables in real estate. And, as a typical home buyer, this is experience that is impossible to gain in just a couple personal transactions.
There are literally hundreds if not thousands of possible pitfalls in a real estate transaction which must be navigated. An experienced buyer’s agent will be able to walk you through episodes that just might include the following:
- The seller did not make the agreed upon repairs.
- The seller is out of town and cannot be reached and there is a fire hydrant in the middle of the driveway that must be moved.
- There is a heavy rain and there is water in the basement the day before closing.
- The buyer makes a large purchase prior to closing and no longer qualifies for the mortgage.
- There are multiple out-of-town owners on the deed and they must all sign closing paperwork.
- The home is offered as a short sale and it takes six months to be approved.
- The home is a foreclosure and the bank is difficult to reach.
- Termites are found.
- The seller’s agent is not communicating well, causing information to lapse or not be conveyed to the seller.
- The buyer moves in and discovers damage that was not disclosed.
- They buyer’s funding is delayed so the closing and possession dates must be adjusted.
And this is just a short list; it could go on and on. The role of the buyer’s agent is to manage the transaction, providing solutions to each of the problems and minimizing stress for the buyer by keeping their client informed. The benefit of working with a buyer’s agent is to have a professional facilitate the purchase of one’s largest asset.
During a real estate transaction, there are many different service providers a buyer must contend with. You will at least have to deal with the mortgage company, the seller’s agent, one or more title companies, the buyer agent’s broker, the appraiser, the inspection companies, and various repairmen. If any one of these providers drops the ball, the closing may be delayed or even canceled.
A good buyer’s agent will have systems in place to manage and track the progress of each of step of the purchase, all the while keeping their client, you, informed.
Interview several buyer’s agents and choose the one who gives you a concise, well-laid out plan from start to finish. A good buyer’s agent will have your best interests at heart to make your home buying experience a success.
If you have plans to buy a home at the beach, in the mountains or in the desert for your retirement years, you might be tempted to take the plunge and buy your future home now while interest rates and home prices are low.
Financial experts say However, people in this 
age group should be aware of the risks of tying up money and perhaps losing flexibility with a second home purchase.
While there’s no denying that we are in experiencing historically low interest rates and low home values right now, anyone considering buying a second home before they retire needs to run the numbers. People get stars in their eyes sometimes at the prospect of retirement, but the reality is, they may not be able to afford to buy another home right now.
Future retirees are better off maxing out their 401(k)s and make sure they have adequately insured their future before thinking about buying retirement homes.
Financing another home before retirement
For 50- and 60-somethings with plenty of discretionary income, buying a home with cash is an option. Others need financing.
There are three basic options for financing a home.
The home can be financed as an owner-occupied home if the buyer lives in it as a primary residence, as a second home or as an investment.
Second-home financing means you will need to qualify to pay the mortgage on both your current home and your second home. If you need some additional income to qualify for the loan, you can rent the property, and a lender may use some of your rental income for a loan approval.
Some lenders suggest that financing a property as a second home rather than as an investment property is the better option because interest rates, qualification guidelines and down payment requirements are generally more lenient on second homes than on investments. An investment loan always requires a down payment of at least 20 percent or 25 percent.
People getting ready to retire might want to consider the benefit of buying homes before they stop working because a mortgage approval could be more difficult to obtain without an income.
Most financial planners will tell potential retirees that buying a second home is not for people who are just getting by. This should only be a choice for people with the income and assets to handle it.