Things to Understand as a First-Time Homebuyer
When you have made the decision that you want to buy a home, it can be an exciting time. The prospect of owning your own piece of property can be exhilarating. However, the process of buying a home can sometimes seem overwhelming. For that reason, it is important to be fully prepared. These preparation steps will help make sure that you are comfortable throughout the home buying process and that you end up in the best home for your life situation.
Understand the Advantages of Homeownership
Every time you make out a check for your monthly housing expenses as a homeowner, you’re investing in your future. As you pay down your mortgage, you build equity in your home that can be used for retirement, or eventually pay off your home and greatly reduce your living expenses. You can also save money on income taxes because mortgage interest is tax-deductible. Having a place that’s all your own gives you the freedom to decorate, remodel and landscape however you choose, making your home the perfect, unique spot for you.
Know What You Can Qualify For
There are federal mortgage programs available to help less-qualified buyers get approved for homeownership. There are HUD-funded housing counseling agencies available to help you find out what you qualify for. If you don’t qualify for a mortgage yet, they can help you know what to do to qualify. Programs are available to help those with bad credit, low incomes, single income and single-parent families, and many others.
Check Your Credit
The first thing that potential homebuyers need to do is get their finances in order. Check your credit score to make sure that you qualify for a good interest rate on your loan. If your credit score is low, take the necessary steps to bring it up, including paying off any lingering debt or credit card balances. It is also important to go through your credit report and check for any incorrect negative information. If you find inaccuracies on your report, settle them with the credit agencies before you head to the bank or mortgage office.
Learning about your local housing community and the steps in buying a home will save you from making any costly mistakes. For example, you should be familiar with what escrow is. It will also help you feel more comfortable when you are talking to real estate agents and loan officers. During this time, it’s also important to really figure out what you want in a home. Create a checklist that you and your family would like to see.
Find a Real Estate Agent
Ask family and friends for referrals. It is important that you pick an agent who is thoroughly familiar with your chosen market. However, its also important to make sure that you have an agent who is willing to walk you through the process and answer any questions that you might have.
Having a real estate agent can make the home buying process go much more smoothly. They can put you in touch with lenders who are approved for the type of mortgage you will need. The real estate agent can also help you to narrow down your property search. They can be a great asset when it comes time to make an offer, especially if counter-offers and concessions will be involved. Find a real estate broker that your friends or family have had a good experience with, and let them help guide you down the path to homeownership.
Talk to Lenders
Educate yourself on the different types of loans that are available as well as any grants or down-payment assistance programs that are available for first-time homebuyers in your city, county or state. Talk with your lender about how much you qualify for. However, it is important to remember that the amount of money that you qualify for is not necessarily the amount that you should spend. Go through your budget and finances or talk to a financial advisor to see how much you can afford to spend on your monthly payment.