We’ve put together our favorite 13 tips for home buyers. Whether it is your first home or not, these tips can be helpful as you consider buying a new home.
Buyer Tip #1: Start saving for your down payment now.
If you’re here reading this, you’re likely considering buying a home. Whether you want to buy next month or next year, you should start saving immediately. Pinch your pennies and save as much as you can. Putting a down payment on a home is a big undertaking. The more you put down, the more it saves you in the long run. Some mortgage programs let you pay as little as 3% down. Keep in mind that might not be the best financial solution for you. You need to hit 20% down to eliminate private mortgage insurance. Reducing the amount you borrow is always a great decision. The sooner you start saving for the down payment, the better! Get started today!
Buyer Tip #2: Research mortgage programs that may be available to you.
There are many programs out there that help first-time buyers get a home. You could be eligible for one or more of them. If you have decent credit you can apply for a standard mortgage loan. There are also programs that cater to specific groups like veterans (VA Loan) and those buying in rural areas (USDA Loan). These programs make it easier to buy a first home by giving more favorable interest rates, lower down payment options, and more. We’d love to help you find more information on these programs where we can. You can also do some research online to find programs that might match your financial needs. Just make sure you start looking sooner rather than later. The kind of mortgage program you choose can influence your home buying process.
Buyer Tip #3: Decide how much you can afford AND actually want to spend.
You don’t want to get into a situation where you are “house poor”. Meaning the vast majority of money goes to your house payment and you can’t afford other things. There are many home buyers who got approved for big mortgages, maxed them out, then regretted their decisions for years to come. A lender being willing to give you the money does not mean you can actually afford to carry a big mortgage. There are many costs to owning a home that you need to consider. We can help you figure out what those are. You also want to be sure that you can take care of other financial needs, like savings and retirement, while still paying your house payment. Use a home affordability calculator to get an idea of how much home you can afford and then we’ll work hard to find you a home within that budget!
Buyer Tip #4: Check your credit and take steps to improve it now.
Financing options and the interest rate are greatly impacted by your credit score when buying a home. It is important to note that the interest rate you receive can impact you financially for many years to come. If your credit score is not high right now, you definitely want to start taking steps to improve it. Be sure to check out the options available to you and give us a call if you have any questions about how credit score impacts home buying.
Buyer Tip #5: Find a reliable and trustworthy mortgage lender.
Picking a trustworthy and reliable lender to work with when buying a home is crucial. You want someone who is knowledgable and will be able to provide you with accurate and helpful financial counseling. Getting the best rate is important but not the only consideration. You want to be sure you will get good service too, including meeting deadlines and responding quickly to requests. We recommend you do your homework and ask the lender lots of mortgage-related questions. Make sure you are comfortable with all the answers and feel confident in your choice of lender.
Buyer Tip #6: Get pre-approved, not just pre-qualified.
Don’t get confused about pre-qualification and pre-approval. Getting pre-qualified for a mortgage is a quick process that only requires giving a few basic points of information to the lender. Pre-qualification is easy to obtain but is not very helpful when you really want to put in an offer to buy your home. Sellers want pre-approval, not pre-qualification. Pre-approval requires more steps and is more similar to going through the process of getting an actual mortgage. It is more time-consuming and not as easy, but going through that early gives you a head start. Your lender will likely give you a letter that says you are very likely to get the mortgage as long as nothing significant changes with your credit or income. If you are shopping in a competitive market, a pre-approval is a huge help to you.
Buyer Tip #7: Find a skilled, reliable and knowledgable buyer’s agent.
Finding a great buyer’s agent is just as important as finding a great lender. Look for an agent that knows your area well, is reliable, honest, and works hard for you. Hiring someone related to you is not always the best decision. Buyer’s agents haven’t always represented the buyer, but in today’s world they do. It is required by law for buyer’s agents to work in the buyer’s best interest throughout the transaction. Buyer’s agents owe fiduciary duties to the buyer exclusively. It is important in a real estate transaction to have a professional represent your needs, negotiate on your behalf, and ensure everything is done properly and on time. We’d love to help you buy your home! Give us a call or CONTACT US.
Buyer Tip #8: Do your due diligence and ask all the questions.
Searching for a home can be exciting. Going to different homes and imagining yourself living there can be a lot of fun. Finding home features that you really want and homes that seem to fit your wants and needs perfectly may seem easy. Just remember to always do your due diligence. Ask questions at every step. If you don’t understand the next step in the process, ask your agent. If something sounds off to you bring it up. Make sure to take all the steps to protect yourself from buying a home where big issues may arise.
Buyer Tip #9: Hire a professional, detail-oriented home inspector.
Home inspectors are there to help you find potential problems with the home that you don’t see. There are good and bad inspectors, just like with any industry, and it is crucial to hire a reliable one with a good reputation. Ask your inspector questions. You want someone who will take the time to answer your questions and discuss issues with you. A good home inspector will also not exaggerate small problems or minimize large problems, they will be frank and honest in their inspection report of the property.
Buyer Tip #10: Stay close to your budget.
Buying your first home, or even second or really any home, can be an emotional rollercoaster. Sometimes this factors into the temptation to go over your budget because you love a specific house so much. Not going over budget is imporant. You set that budget for a reason. Even if there is a little wiggle room in your budget, you want to stay as close to it as possible. Even if that means walking away from a home you really like.
Buyer Tip #11: Plan for your move ahead of time.
If you are serious about looking to buy a home, then you know that moving is in your near future as well. The sooner you begin planning and preparing for your move, the better off you will be. It is a lot of work and, depending on the circumstances, can get quite expensive. If you’re hiring a moving company, be sure to get multiple quotes. Just remember, the cheapest option is not always the best option.
Buyer Tip #12: Research the neighborhoods and schools for each potential property.
Different neighborhood features can be attractive to you. Each will be different, so it’s important to look at the neighborhood as a whole when you are considering a specific home. You will want to consider if it is well-established, or has a lot of new builds or lots that will be built in the future. You may want to look at statistics or features that appeal to you. Homes in highly rated school districts are often easier to sell if you decide to move again in a few years. Local real estate agents likely know the features of each neighborhood in your area and the ratings of schools, so be sure to discuss this with them.
Buyer Tip # 13 – Think long term, both personally and financially.
Buying a home is a huge commitment. Will you be starting a family in a few years? Will your children be moving out soon and leaving you with a large empty house? Are you going to want a yard for future pets? All of these personal questions and more should factor into your decision on which house to buy. Same goes with finances. A home purchase is an investment that will likely appreciate in value. That being said, no one is able to foretell the future. Considering future financial stability is very important when determining your budget and type of home you are looking to buy.
We hope these 13 tips for home buyers are helpful to you! Anything you’d add? Let us know! CONTACT US.
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