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10 Tips to Being a Savvy First Time Home Buyer

TitleBlogAugThe home buying process can be overwhelming for even an experienced buyer. When you’re entering into the home buying process for the first time there are some things you need to know before you get started. These 10 tips will ensure you’ll be ready when you find the home of your dreams.

1. Calculate Budgets and Assess Debt – When you decide to buy a home it’s important that you look at your income and existing debts and determine what’s reasonable for you to spend monthly on your new home. Your monthly expenses should not be more then 36% of your monthly income. If you have old debts you can pay off it may improve your ability to qualify for a loan. Do your research before paying off debt in advance of a home purchase. If you don’t have a lot of existing debt it’s time to start pinching pennies and saving for your big purchase.

2. Speak with the Experts – You may not be ready to apply for a mortgage or start seeing houses but that doesn’t mean you can’t reach out to a local real estate agent and mortgage broker. They can help inform you on their process and answer any questions you may have about timing and best practices.

3. Get Organized – Applying for a mortgage requires a lot of documents. You will want to review the loan process required by your mortgage lender and find out what documents they will need. Locating pay stubs, recent W2’s and two years of tax returns is a good place to start. The more you organize these documents before you apply the less scrambling you will have to do to obtain these documents when they are requested. You can see a full list of the documents required by Title Mortgage online.

4. Create a List of Must Haves – Before you see a single home sit down and make a list of what you want from a home. Keep this list handy so you can look back at it while you are seeing houses. It can be easy to get caught up in the excitement of seeing houses but you don’t want to settle. To ensure you will be happy in the home for a long time, make sure it meets most of your must have list.

5. Prepare for Homeowner Expenses – Owning a home can come with lots of unexpected costs. Make sure you consider this possibility before jumping in. You want to be comfortable that the home you purchase leaves room in your budget for the unexpected. You also want to consider if you want to buy a fixer up that can get expensive over time or a newer home that may be more expensive from the start but require less work down the line.

6. Research First Time Home Buyer Programs – Look into first time home buyer programs offered by the local or federal government. These programs can be a big help so take time to research what is out there that may help you. Title Mortgage has several first time homebuyer programs, contact us for details.

7. Get Pre Qualified – When you’re ready to take the leap and apply for a mortgage you need to start with a pre qualified letter. The pre qualification will give you a better idea of your home budget and allow you to begin looking at homes. When you are ready to make an offer on a home you will need this letter to include with it, especially as a first time home buyer.

8. Keep a Level Head – A home purchase can be emotional. It’s easy to get attached to a home and when emotions are involved it can be hard to keep a level head during the process. You want to make sure you work with a buyers agent that you trust who will advise you as you look at homes and prepare to make an offer. Avoid rash decisions and take time to think things through. Getting emotionally involved may cause you to settle for a property that doesn’t meet all your needs or cause you to overlook an undesirable feature in the home you’ve become emotionally invested in.

9. Negotiate – When you’ve found the home you want, you probably don’t want to offer the full asking price. Talk to your real estate agent about the value of the home and the work needed. Consider the current market in your area and start with a price point you are comfortable with. It is wise to start below your maximum budget so their is room for further negotiation.

10. Put Professionals In Your Corner – Once you agree on a price for your home purchase the work really begins. Once your purchase and sales contract is signed you want to meet with your mortgage professional as soon as possible. The mortgage lender will hire an appraiser and a real estate attorney on your behalf. The appraiser will provide value and the attorney will review docs and clear title, etc.  In addition to these professionals you will also need to hire a home inspector to evaluate the home and provide you with a report on the home structure. The inspection will help you get an idea for problems that may arise in the future and alert you to an urgent issues that need repair. After the inspection you have the opportunity to go back to the sellers and negotiate further.

Use these tips to help you prepare for buying your first home. As your closing date approaches and you’ve met all your deadlines and provided all the necessary paperwork, all that is left to do is wait, and pack. Get yourself organized as you prepare to move into your first home!

If you want to learn more about the mortgage lending process or your ready to fill out a mortgage application, call Title Mortgage today at 603-643-1400.