Being a first time home buyer is exciting!
It should be one of the remarkable experiences of your life to buy a home. After all, there are so many steps, tasks and requirements and you worry about making an expensive mistake. For the first time homebuyers really enjoy some of the unique benefits created to encourage new entrants into the real estate market. To demolish the home buying process, you can get the most out of your purchase, the condition you should consider before you buy and what you can expect from the buying process, as well as your first tips to make life easier after the purchase home.
1. Pay off all debts and create an emergency fund:
Owning a Home is Expensive – Your monthly home payment is much more expensive than rent, even if it is equal to or cheaper than your current rental amount. Because when you own a home, you are responsible for all maintenance and upkeep costs. And they can add fast! So, before you think about buying your first home, make sure you are debt free and have an emergency fund for three to six months expenses.
When you come home with no payments (other than mortgages) and you have a large emergency fund, you will have cash to pay for the huge expenses that suddenly come your way.
2. Save down payment:
If paying cash for the total price of the home is not appropriate for your family time, save for paying at least 20% or more. Then you do not have to pay for private mortgage insurance (PMI), which protects the mortgage company if you fail to make your payments and end up in foreclosure. The PMI usually consists of 1% of the total loan amount and you are charged 1% per annum. So it can really add a lot more to your monthly mortgage payment.
3. Get Out of Loan:
Once you are confident that you have enough cash left to pay the closing costs and 20% of your home, you are ready to handle the remaining 80% by talking to the local mortgage lender.
Get qualified in advance for the loan and take the extra time to get the promotional letter before you start your home search. Pre-approval shows sellers that you are a serious buyer, which is a great way for first time home buyers to move forward in a competitive market.
4. Go to open houses and think long term
Once you are cramped out of the neighborhood, head into some open houses. Looking at homes for sale – even if they are not right for you – is a great way to learn more about the area. When you finally find the house you like, you will know how your space compares to the good or bad houses in that neighborhood.
When it comes to buying, finding the cheapest home in the best environment is a good strategy. If you buy less than the price range in good surroundings, you will have more space to create home value.
5. Offer Competition:
Suppose you find the house you want. Since you are already campaigning for a loan, you are ready to make an offer. If you are a first time home buyer, it is difficult to know how much you have to offer. When you trust the expertise of your real estate agent.
Ask your agent to make sure your offer is competitive, but within your budget and home value. Be careful not to offer more suddenly than yourself to resist competition.
6. Prepare to close
The closing process starts once the client receives your offer. Make things run smoothly by knowing what to expect when closing at home. The average closing process takes 43 days, which gives you a lot of time to deal with the finish item. A real estate agent will schedule the remaining steps from the home inspection to the final walk and they will inform you of any obstacles.