8 Tips for a First-Time Homebuyer

House Exterior

The thing about buying a home for the first time is pretty simple; it’s not always something tells you how to do or what to look out for. Which is fairly ironic given that home ownership is what the American Dream was initially founded upon.

So, we’re going to help you out a bit and show you eight things you absolutely have to know when you’re ready to purchase your first home.

  1. Know your budget. Paying your mortgage is a bit different than paying rent. You now have to figure in escrow, applicable taxes, insurance, and homeowners’ association fees (location dependent). Make sure you’re choosing a house you can afford, because it can be stressful if you’re living “house poor.” It’s recommended you spend no more than 28 percent of your income on housing costs.
  2. Find a well-informed, knowledgeable realtor that knows your area well. Knowing if an area is too high or about to fall can save you thousands of dollars. Moreover, knowing how home prices in the area are comparable to what you’re looking at will help you make a better, more informed decision. Check your local multiple listing service (MLS) with your realtor!
  3. Prepare for closing costs, they could cost you a pretty penny. These costs include origination, title, and settlement fees, as well as taxes and prepaid items such as homeowners’ insurance or homeowners’ association fees.
  4. Credit score matters. Just because you have a qualifying credit score, doesn’t mean you have the best score to help land you the best rate. You should start cleaning up your credit at least a year in advance of making a home purchase, just to make sure you’ve crossed your T’s and dotted your I’s when it comes to financial matters. Get your credit report and start combing through it before it’s too late.
  5. Along with your credit score, it’s good to get all your paperwork in order. Get pay stubs, past W-2s and tax returns, bank statements, and previous address information ready because you’re going to need them. Lenders are going to want to see a lot of your personal stuff before they’ll give you a sizable loan.
  6. Speaking of lenders, you should always get preapproved. This gives you more bargaining power when it comes to landing that house you just fell in love with.
  7. The government has some programs to help. The Federal Housing Administration (FHA) has a program that insures mortgages for many first-time homebuyers. This will help sway those lenders to back you, and the FHA reduces most 10-20 percent down payments down to 3-3.5 percent. That’s a pocket full of help right there.
  8. Make sure that home buying is the right choice at the right time. Contact me today at 817.690.0976, I would be happy to answer any questions you have about finding your dream home!

Pam Snowden

Realty World Professionals

817-690-0976 (cell)