Tips for First-Time Home Buyers
Being a First Time Home-Buyer is SO EXCITING!! But it can also be a bit overwhelming, especially when you’re in a hot market like ours in North Texas!
It doesn’t have to be scary, but you have a bit of homework to do first. Take a look at these tips and see how many you’ve been able to cross off as you prepare to become a new homeowner:
_____ Pay off All Debt and Build an Emergency Fund. Financial expert Dave Ramsey suggests you do your best to be debt-free and have an emergency fund of 3-6 months of expenses in place. Once you’re debt-free, be sure you STAY debt-free. This means have a budget and pay attention to it! You may have empty rooms for awhile, but you’ll be happy down the road.
_____Figure out how much house you can afford. Use this handy Mortgage Calculator from nerdwallet.com to figure out just how much house you can afford.
_____Save for your Down Payment. Try to save for a down payment of 20% or more. Doing so will keep you from having to pay for private mortgage insurance (PMI), which usually costs 1% of the total loan value and is added to your monthly payment.
_____Save for Closing Costs too. Closing costs are, on average, about 3-4% of the purchase price of your new home. Your lender will give you a specific amount to bring to your closing. Closing fees pay for important steps in the home-buying process, like: Appraisal | Home inspection | Credit report | Attorney | Homeowner’s insurance.
_____Get Pre-Approved for a Loan. Pre-approval indicates to sellers that you’re a serious buyer, and that’s a good thing! To get pre-approved, your lender will need to verify your financial information (proof of income, taxes, debt, etc) Keep in mind that mortgage pre-approval doesn’t completely guarantee your loan will be approved, and is generally only valid for a specified amount of time.
_____Find a Home! In Your Price Range! The majority of buyers found their homes online or through a real estate agent. The best of both is to find homes you like online, then send them to your real estate agent so they have a good idea of what you’re looking for. Your agent can then find homes that meet your criteria in your desired area.
_____Research Neighborhoods for Best Fit. Information to look at includes crime rates, school quality, commute time, traffic conditions at various times of day, how well are homes maintained. Ask your REALTOR about neighborhoods or communities that you’re considering. Drive the neighborhoods you’re considering at different times of day to get an idea of traffic, are there a lot of children, noise levels, etc.
_____Narrow your research. Once you have a short list of neighborhoods you’re considering, visit a few open houses to learn more about the area. Visit homes in all price ranges, not just yours.
_____Make a Competitive Offer. Since you’re pre-approved for a loan, you’re ready to make an offer. As a first time homebuyer, you will want to rely on your real estate agent for guidance on making an offer that is both competitive, within your budget and in keeping with the home’s value.
_____Prepare for Closing. Once your offer is accepted, the closing process will begin. Average closings for our area are running 27-40 days. The best advice we can give you is to read EVERY document and ask your Realtor to explain whatever you don’t understand. Remember you are responsible for any document you sign, so be sure you know what you’re signing!
Now smile! You’re a homeowner!! Congratulations!
Ready to buy a home? Let The Seay Realty Group help. We’ve been guiding new homeowners since 2006. Call us today.
