What You Should Know As a First-Time Home Buyer
It’s National Home Ownership Month—and it also just so happens to be a popular time of year for home buying. Buying a home is an extremely important step in life that comes with its own set of challenges, hurdles, and lots of decision-making. But with a trusted REALTOR® like me, I make the process as seamless as possible! Before you even begin thinking about buying a home, familiarize yourself with these helpful tips.
Start Saving Now!
Buying a home comes with a lot of costs, so you’ll need to be sure to start saving up right away. Calculate a budget that includes things like the down payment (which can be as little as 3% down), closing costs (the fees you must pay to finalize your mortgage), and moving expenses (note that long-distance moves will cost more)—in addition to other one-time expenses and recurring bills.
Polish Your Credit Score
Your credit score will determine if you’re eligible for a mortgage and can affect the interest rate lenders will offer. Naturally, having a higher score will get you a lower interest rate, which would be a big win for you!
Be Ready to Get a Loan
A lot of first-time homebuyers will need to take out a loan—and that’s perfectly okay! Most mortgage loan terms range 15 or 30 years long, even if you don’t think you’ll stay in the home for that long. There are several different types of loans to consider, from conventional loans, which offer low minimum down payments but have stricter qualifications and are not guaranteed by the federal government, to FHA loans backed by the Federal Housing Administration (these are typically easier to qualify for than conventional loans) and VA loans from the Department of Veterans Affairs for active or former service members and eligible spouses.
Gather Your Documents
In order to get approved for a mortgage, you’ll need several documents handy in order to verify your income, assets, and debt, including proof of income and employment (tax returns, W-2s, 1099s, etc.); bank, retirement, and brokerage statements; debt payment records (student loans, auto loans, and any other real estate debt history); and any other documentation regarding your finances such as divorce, bankruptcy, or foreclosure.
Narrow Down Your Neighborhood/Home Type Preferences
You’ll want to have some neighborhoods in mind for where you’d like to live, as well as the type of home you prefer—whether it’s a single-family home, townhouse, condo, or anything in between. Weigh the pros and cons and do some research on different neighborhoods in the area. Pro tip: An existing home generally costs less than buying a new construction home, but of course, there are benefits and negatives to each.
Visit Walk-Throughs and Open Houses
While you can definitely buy a home sight unseen, it’s always smart to visit your potential future home in person first before committing. This way, you’ll be able to really get a sense of a home’s condition and take an extra hard look at every room. 3D home tours have also gotten popular as of late and are a good option if you’re moving out of state and don’t have the opportunity to make an in-person visit first.
Get a Home Inspection
In the same vein, a home inspection will allow a professional to do a more thorough search of the home, looking especially at its structure and mechanical/plumbing systems. Inspectors look for issues that may be out of sight, out of mind to the buyer and seller—including things like radon, mold, and pests—that allow you to make a more informed decision before you buy.
Buy Good Home Insurance
Home insurance is almost always required before closing on a home. But it’s a great investment nonetheless, as it can help cover the cost of repairs or replacements if your home or belongings are damaged by an incident covered in the policy. You’ll want to buy enough insurance to cover the cost of rebuilding if your home is totally destroyed.
Choose the Right Real Estate Agent
A great real estate agent can make the home-buying process all the more seamless and stress-free for you. That’s where I come in! I can help scour the local market for the right home for you, recommend inspectors, guide you through the negotiation and closing processes, and more. Contact me today to get the conversation started at 919-438-0548 or Ryan@HudsonResidential.com!