Article summary
Deciding to purchase your first home comes with a rush of emotions. Excitement. Anxiety. Satisfaction. The process of buying a home can be stressful at times. Here are five tips first-time homebuyers can follow to make their experience as smooth as possible.
Tip #1: Get preapproved before you start looking.
A pre-approval letter allows you to put in an offer immediately when you find a house you love. With financing in place, you’re more likely to get the house you want. In a market where houses sometimes sell the day they’re made available, it’s in your favor to be completely prepared.
Tip #2: Know what you can afford and don’t look above your price range.
Most financial advisors recommend spending no more than 28% of your gross monthly income on housing expenses. That includes mortgage, insurance, taxes, and any HOA dues. Your pre approval letter indicates the maximum amount you can spend on a house, but it’s likely wise to aim for less than that to ensure you can comfortably make your payments.
Whatever you do, don’t look at houses that are priced higher than you can afford. That’s a recipe for heartache!
Tip #3: Know your long-term plans
Knowing how long you plan on living in your new home can help you decide what kind of mortgage you want. Most people choose between a 15 or 30-year fixed-rate mortgage. However, if you know with certainty that you plan on moving from the home within the next 5-10 years, an adjustable-rate mortgage can actually help you save money. An ARM is going to be considerably less expensive than a fixed-rate mortgage for the fixed period at the start of the loan.
Tip #4: Get the inspection.
It may be tempting to waive the inspection to make your offer more competitive, especially if you’re trying to buy the home of your dreams. Don’t do it.
A home inspection is necessary to protect yourself both physically and financially. Inspections can reveal costly foundation issues, identify illegal additions, and predict future costs. In addition, the EPA recommends a radon inspection if you live within a radon zone.
Tip #5: Choose a real estate agent you can trust
It’s technically true that you don’t have to use a real estate agent. But as you embark on your home-buying journey, it’s wise to take advantage of an experienced agent who can make things easier. Why work with an agent?
- They are approaching your situation with an objective mindset.
- You can save time by only being shown houses that fit your criteria.
- An agent can help with negotiations and the dreaded paperwork.
- Commission comes out of the home’s selling price, not the closing costs that you pay.
Bonus tip #6
REZITRADE’s Home Price Protection can offer peace of mind as you prepare to make the largest investment of your life
Takeaways
- Before you begin looking at homes, prepare financially by determining what you can afford and securing a pre-approval letter.
- Consider your long-term plans when choosing the type of mortgage loan you will use.
- Always opt for a complete home inspection.
- Work with a real estate agent for the optimal home-buying experience.
