5 Tips for First-Time Home Buyers
Buying your first house can feel overwhelming. You need to track down the right property, negotiate over the price, sort out financing, and budget properly to make sure you can handle the mortgage payments. There’s a lot to take care and a lot to learn along the way especially if you are a first-time home buyer.
To help you get prepared and make sure your first purchase is a success, here are five helpful tips for a first-time home buyer to keep in mind.
Decide on What You Need Before Looking
Before you start looking at properties, you should make a list of the features you absolutely need in your new home. How many rooms do you need? Do you want a backyard? Do you need to be close to a school? This planning will help you narrow down your search so you won’t waste time looking at houses that don’t fit your needs. It’s also important to think about this before you start looking so you don’t fall in love with the wrong property. Some first-time buyers get so caught up in the excitement of finally buying a house that they end up buying something that’s too small or in the wrong location. By thinking about what you need in advance, this won’t happen to you.
When you apply for a mortgage, your credit score is incredibly important. Without a good credit score, it’ll be hard for you to qualify for a loan. Also, a better credit score can help you qualify for a better interest rate which can save you thousands of dollars over the course of your loan.
Before you start the buying process, take some time to fix up your credit score. If you have any outstanding credit card debt, you can increase your score by paying off the balances. Also, make sure not to close any old credit cards or open a new card right before you apply for a mortgage because both moves lower your score. Finally, if your score isn’t ideal, you may want to delay buying your house for a few months. Take this time to make all your monthly credit payments on time and improve your score.
Negotiate Over Everything
Negotiating isn’t a big part of our culture and that’s a problem when you go to buy a house. First-time buyers rarely negotiate which means there’s a good chance they’re paying too much. Make sure you enter in negotiations with the seller ready to negotiate. Try entering in an offer below the listing price. Many sellers are happy to finish the deal and will take less. If they won’t budge on the price, see if you can save in other parts of the deal. Ask if the seller would be willing to pay the closing costs, would leave behind the household appliances, or would pay for some extra repairs as part of the deal. Every dollar helps.
Prepare for Your Mortgage Ahead of Time
Once you’ve found the right house, you don’t want the deal to get held up from the financing. If you know you’re going to apply for a mortgage, it’d be a good idea to get pre-approved for a loan. That way you know how much you can qualify for and won’t have to worry about a deal falling through because of problems with your lender.
Make Sure You Understand What You’re Signing Up for
Before signing any contract, make sure you understand exactly what it is you’re signing. When you sign the contract to buy your house, read through and see that it clearly lists all the fees as well as your other responsibilities as a buyer. For the mortgage, make sure you understand the payment schedule and any other fees. If you’re confused about either, which is totally understandable as a first-time buyer, ask your real estate agent or mortgage broker to explain. Don’t sign anything until you feel completely comfortable.
If you are a first-time home buyer and you can follow this advice, you’ll be in a great position to manage the purchase of your first home. Then, you can sit back and enjoy your new life as a homeowner.