We are in the midst of a housing boom that’s set to last into next year, at least. So, if you’re interested in learning how to buy your first home, you certainly aren’t alone.
Embarking on the home-buying process to find your first homes can be a daunting step. There’s so much to learn, and so much to be wary of as a first-time buyer. However, with a bit of help, you can savvily navigate the real estate industry, find your perfect place and buy it without too much heartache.
So, if you’re ready to study up and succeed, here are our best tips for first-time homebuyers –
1. Know What You Can Afford
Before diving into the real estate market, it’s important to have some basic knowledge about your dream home. Sure, you know what features you want it to have, but do you know how much they cost and whether or not you can afford to have them?
Start your home-buying journey by sitting down and having an honest look at your finances. Hopefully, you’ve started saving up to pay your down payment and cover expenses, such as your closing costs. You should also have the cash to pay for your move and any other small incidentals that pop up.
Once you know how much you can put down, you’ll be able to calculate how much house you can buy. Your savings, income, mortgage rate, and other factors will influence this number.
2. Seek Out Mortgage Preapproval
Now that you have your savings lined up and an idea of what you can afford, it’s time to confirm it with the pros and seek out mortgage preapproval.
To give you the preapproval, lenders will confirm how much money you can get when it’s time to get your mortgage. They come up with this figure based on your savings and monthly income, as well as your credit score.
Don’t confuse this with a prequalification letter. The latter is a less formal evaluation of your funds and earnings, so it’s not as official as a preapproval letter in securing your mortgage down the line.
3. Keep Your Credit in Good Shape
We mentioned above that your credit score will play into the home-buying process. Chances are, lenders will check your credit score more than once throughout your home-buying journey, so make sure you’re keeping your reputation squeaky clean.
You should work to improve your credit score before buying a house if you haven’t done so already. You can do this in many ways. For example, paying your bills on time and making more than the minimum payment can help boost your standing.
Don’t let your steady payments falter during the home-buying process, either. And be sure to hold onto your current credit cards without opening any new lines of credit. Moves like these can make lenders wary of giving you a mortgage — maintain your best credit to show you’re worthy of such a big loan.
4. Know What You Want
Whether you’re going for owner financed homes or a more traditionally financed abode, you should know exactly what it is that you need in a property.
Now, we’re not talking about the finishes and fixtures that you dream of in your dream home. We’re talking about the must-have features of a property that will make a sale.
So, for starters, know what kind of property you’d like to buy, or at least the type of property you’d be open to purchasing. Would you be happy with a condo or townhome, or would you prefer a detached single-family home? Maybe you want a place with a rental property built into it — know this before starting your search.
Next, think about the area where you’d like to live. Do you have a neighborhood in mind? If not, list out what you’d need from your future neighborhood, such as good schools or easy transport links. If you already have an idea of where you want to live, consider searching for loans based on your profession next. For example, if you work in the medical field and want to live in California, try searching for physician loans in California. You may find that there are lenders that specialize in working with people in your occupation and desired location.
Once you have that all worked out, think about what the home has to have to make it work for you. An updated kitchen is nice, but is that a necessity? We’re talking more about the house’s bones — are there enough bedrooms, is there a backyard, etc.?
Nailing down your needs versus your wants before you start shopping can be very helpful in the buying process. That way, you won’t be disappointed if you find you can’t afford what you want. Instead, you’ll know what you need and be able to find those qualities in a potential property.
5. Make Sure You’re Ready to Commit
So many first-time buyers begin the home-buying process with a wealth of positive energy. But when it comes down to it, signing on the dotted line, buying a house, and committing to a decades-long mortgage is a big deal. Are you ready to take that step?
Be sure you’re in the right headspace before embarking on such a major project. On that note, be sure you’ve prepared yourself for disappointments, too — you might lose out on the house you want, and that may happen multiple times throughout your search.
However, if you’ve prepared yourself enough and you feel ready to buy a home, then you should feel free to jump in. Just be sure you know that it’s not going to be easy, and it requires a huge, perhaps lifelong commitment to get the home of your dreams.
Find Your First Homes Now
With these five tips in mind, you should feel more prepared than ever to enter the real estate market. Everyone’s first homes will be different, but each one will mark a huge step in the owners’ lives. If you’re ready, then take the leap, roll with the punches, and find the perfect place for you and your family.
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