In 2020, there were over 2 million first-time home buyers. First-time home buyers are excited and nervous about purchasing their new home. You might have a lot of questions, concerns, and likely don’t know where to begin.
Even though the process seems daunting it doesn’t have to be. Once you understand the steps you can feel confident in moving ahead with buying a home.
If you’re thinking about moving, here are some home buying tips you need to know before you move forward.
Setting a budget for how much you want to pay for your mortgage each month is essential. Many people have lost homes due to financial difficulties like overbudgeting because they cannot make the payments.
While many financial experts disagree about how much you should spend on your mortgage, the average percentage to aim for is about 28% of your budget. This would include taxes, interest, and so forth.
2. Get Pre-Approval
After you’ve set a budget, you’ll want to get a pre-approval loan. This type of loan isn’t an immediate approval, but it makes things easier when you’re shopping for a home. With a pre-approval, you already know you can afford the houses that you’re looking for, and won’t shop for ones outside of your price range.
There are plenty of mortgage options available. The best thing to do is shop around to find the best rate. You’ll need to make sure you have all the necessary paperwork to make the process go smoothly.
3. Check Your Credit
Your credit score greatly impacts the type of rate you receive on your mortgage loan. Before applying for a loan, check your credit score. If your credit score is low, there are things you can do to bump it up.
Paying your bills on time is one of the best things you can do to keep your score healthy because this is the bulk of how your score fluctuates. Having open credit is useful as well, but make sure it’s paid and there are no remaining balances.
Even if your score is relatively high, practicing these financial steps helps keep it in great shape and may cause it to raise a point or two.
4. Hire A Realtor
While you can shop for homes on your own, the process seems overwhelming, especially for first-time homebuyers. Hiring a realtor can make house hunting more simple.
There are many benefits to hiring a realtor. Realtors understand the area in which you’re looking to move. They also help you find homes, negotiate, set up appointments to view homes, and so forth.
Hiring a realtor is especially important if you’re a busy person who does not have time to look for homes, or you need help with the buying process.
5. Create A Checklist
Do you know what you’re looking for in a new home? If so, start writing a checklist of needs and wants.
For example, if you have a large family, you might want several bedrooms, a bathroom, and a nice yard or school district. If you love to cook, you might want a grand kitchen.
It’s important to distinguish your needs from your wants. Most homes you view will not have every feature you’re looking for, so set some priorities on what needs are most important to you.
6. Have A Vision
When you’re viewing homes, it’s best to keep an open mind and a vision. Not every home you view will be perfect, and you may need to make changes to it.
For example, if you don’t like the paint color, you may need to paint. Or, if there are walls that might need to be removed, or redone, that’s a project for you to make the home your own.
Look at all homes with an open mind. This way, you’ll have more flexibility in your choices.
7. Go to Open Houses
The good news is that you don’t have to stick with homes you find on your own. Visit open houses in the area you’re considering. This gives you a broad view of what the neighborhood is like and the cost of homes in that area.
Going to open houses allows you to see what features you may want and what you could live without. Having a checklist is great, but attending an open house gives you a different perspective and could spark some new ideas.
8. Save Money For Downpayment
Most conventional loans today require you to have a downpayment on a home. This ranges between 3-20% depending on the loan. However, you can put down more than the required amount.
If you’re serious about buying a home, saving for a downpayment is crucial. Start working within your budget to find out how much house you can afford and start a savings fund for a downpayment.
9. Don’t Forgo an Inspection
Once you’ve found a house you love, you might be ready to move in right away. However, while it may be tempting to forgo an inspection this is a large mistake that many first-time buyers make.
An inspection is crucial because the inspector will tell you potential and present problems with the home. This way, if there are serious problems, you can walk away completely, ask the seller for compensation or fix the issues.
Use These Home Buying Tips
Home buying tips are necessary for first-time homeowners so they can feel confident and calm in the process. Following these tips helps you pave the way towards your new home with as few problems as possible.
Are you looking for a home in Alexandria, VA? Our realtors are ready to help you find your dream home. Contact us today for help with all your real estate needs.