So you’re finally ready to purchase your first home—how exciting. Although it might feel as though it’s taken you a while to get to this point, the real work is just beginning… which is why you’ll need some tips for first-time home buyers. To start, you’ll have to choose your town (or city), your neighborhood, and—most importantly—your exact home. The more you look at real estate, the more you’ll get a sense of whether you want a fixer-upper or a place that’s move-in ready, whether you want exposed brick or high ceilings, and whether this will be a starter home or long-term abode. In order to uncomplicate things during this very important time, we’ve rounded up the need-to-know tips for first-time home buyers from those who’ve already done it. Read on to see how to prepare.
Get your finances in order.
Let’s hope you (and whoever you may be purchasing the home with) have an awesome credit score since this is a huge part of the mortgage application process.
Get pre-approved.
So many potential homeowners are afraid to actually run the numbers. Rather than seeing if they actually qualify for a mortgage, they go house hunting and fall in love with a place completely out of their price range. But one tip for first-time home buyers is to get pre-approved by a mortgage lender (this carries much more weight than just being “pre-qualified”). Being pre-approved greatly increases your chances that lenders will give you a mortgage when it comes down to it. During the pre-approval process, a lender will talk about your credit, income, and any assets you may have. “A lender who pre-approves a buyer runs their actual credit and verifies their income and assets,” says Michael Minervini, a real estate agent in Red Bank, New Jersey. “That's a major difference since agents and sellers view a pre-approval as a more firm start to the home-buying process.”
Ask for references.
Word of mouth is always your best bet when it comes to finding a real estate agent, loan officer, or reputable home inspector. First, ask friends and family if they have anyone they’d recommend. If you don’t have any potential leads, you can google professionals in the area who are highly rated and ask to speak to some of their recent clients.
Beware of hidden costs.
Remember how parents always told us to read the fine print? This is kind of the same thing. There may be extra costs associated with loans or closing costs that you haven’t considered (closing costs alone are typically around 2% to 5% of the cost of your house). Regardless, all of these miscellaneous expenses add up, and you don’t want to be caught off-guard.Don't overextend yourself.
Yes, we understand you want the house of your dreams—or at least something close—but this isn’t just one large credit card bill you have to pay off. Mortgages are decades-long commitments, so make sure to factor in things like whether you and/or your partner will continue to work, or any other big purchases you’ll need to make in the near future. This is one of the tips for first-time home buyers you shouldn’t ignore.
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