Buying your first home can be exciting as well as confusing and stressful. Decisons have to be made. Sometimes, wrong decisions can have dire consquences. The whole process can br time-consuming, and worse yet, costly if not done right.
Below are five tips to help first-time home buyers navigate through the purchase of their home with finesse and style, and as little stress as possible.
Tip #1 - Work with a reliable real estate agent.
A real estate agent can walk you through the process of buying your first home. They can connect you with lenders, inspectors, and most of us can point out the positives and the negatives in the homes you are looking for. They have the resources to suggest properties that will fulfill your needs. They also have the negotiating power to help you come to a win-win with the seller.
Tip #2 - Monitor your credit score.
For better or worse, loans for anything these days are driven by credit scores. Monitoring the score closely will help put you into a position for getting the best interest rate on a house. Nothing is more discouraging than locating the house of your dreams only to discover that your credit score is subpar and the lender refuses to underwrite the loan amount you need.
And, in monitoring ahead of time, you can take care of any nitty gritty problems before you start looking for a house.
Home is the starting place of love, hope, and dreams.
Tip #3 - Shop around for a mortgage.
Just like you can shop around for a car, for a car loan, for a real estate agent, for a house - you can shop around for that mortgage as well. Talk to several loan officers. Different loan specialists can offer different perks for different people and different needs. The loan acquisition process is certainly not a one size fits all endeavor.
Now, the question often asked is "Will speaking to several loan specialists hurt my credit?"
No, not if you are researching and shopping around within a 30 day period. And loan specialists, when first speaking with you, run soft credit checks. These credit checks have less impact on your overall credit score than the hard credit checks performed when shopping for loans such as cars, or when trying to acquire a credit card.
Tip #4 - Don't skip the inspection.
Buyers are often tempted to skip the inspection on the property. They do cost money. First-time buyers, especially, oftentimes feel as if they don't have the money to afford the inspection.
The inspection, however, can save a buyer a world of hurt in the future. Houses can look put together and loved with new paint, flooring, doors, etc. The insides, however, may be harboring mold, termites, wood rot, and more. Not to mention that the systems in that house - the AC, the appliances, electrical wiring and more, may have serious issues that you cannot see.
Should the inspector find something seriously wrong with the house, your real estate agent can negotiate on your behalf to get the issue fixed or to lower the price of the house to accomodate the needed repairs.
And, if all else fails, you can walk away from that house and toward another one that is more suited to your budget.
Tip #5 - Don't buy more house than you can afford.
If you are working with a loan specialist and you obtain a pre-qualification or pre-approval letter, and you have a good real estate agent - buying a house you can't afford is not likely to happen. But, at the end of the day, the mortage company may offer you a loan above what you can comfortably afford, and the real estate agent works for you and does your bidding.
So, know your budget. Know what other expenses you are obligated to pay for, will be paying for in the future, and what you want to pay for in the future. Granted, you cannot know everything that will come up in your life, but you do not want all of your monthly income is going toward a mortgage with no wiggle room for necessities and/or expenable income.
Remember: First-time home buyers are first-time home owners.
Be realistic in buying your first home. First time homes get you into the market. You build wealth in equity in that home, and equity accrues as you make payments, update and make repairs and, best of all, while you live in the home. That's why buying a home makes so much more sense than renting.
And, the expectation is that in a few years, you will want to move again. You will take the equity you built in that first home and apply it to the next home. Perhaps, you will even buy another one after that.
After all, wherever you are living, it's your house and your story - but you can't write it without taking that first step!
Donna Hechler Porter is a real estate agent with Keller Williams Elite Realty in Baytown, Texas. An educator, a published author, and an arm-chair historian, Donna runs a small publishing business in addition to educating people about how to build future wealth through home ownership. Feel free to contact Donna at dhporter@kw.com.
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