Buying a home, especially as new home buyers, can be a confusing and intimidating process. We get it, because we’ve seen it and have even experienced it ourselves. But don’t worry, you don’t have to drink that firehose of information by yourself. Here we have friendly advice to help you get on firm footing and feel confident going into your home buying experience.
If You Can, Save Up For A 10-20% Down Payment
If saving up to pay cash for the total price of a house isn’t reasonable, at least try putting aside money until you can afford a 10-20% down payment. At 20%, you won’t have to pay private mortgage insurance (PMI) on your bills when it comes time to start house payments.
PMI is a way that mortgage companies can protect themselves in case of a foreclosure on the part of a buyer. Generally, PMI makes up 1% of the loan amount, which you will be charged each year. Being able to waive this payment will save you lots more in the long run.
Some home buyers, especially new home buyers, might find that a 20% down payment might be a little too much, even after intense saving. That’s fine, feel free to lower the goal to 15% or even 10%. But never go lower than 10% unless you want to pay extra in fees and interest.
Don’t Forget To Factor In Closing Costs
Unfortunately, there is another payment to factor in on top of your down payment – that is, closing costs.. On average, closing costs entail around 3–4% of your home’s purchase price. Your lender will give you an exact figure so that there are no surprises come closing day. This expense is divided between a few important steps, such as:
- Home inspections (which is a must-have)
- Credit report
Neglecting to factor in closing costs can lead to a major out of pocket expense that you might not have been expecting.
Get Preapproved Before Looking For A Home
Financial experts agree (see examples here and here) that if you want an edge in a very competitive homebuying market, then a preapproval letter is the way to go.
Taking the extra time of getting prequalified for a loan and getting that preapproval letter is like having a big sign with an arrow over you that says, “This is a serious buyer!” Sellers love it because it shows that you are more readily able to pull the trigger on a home purchase.
In other words, a mortgage preapproval letter before starting the home search will allow you to go in with many more opportunities.
Make Your Neighborhood A Priority
Remember the first rule of real estate: Location, location, location.
You could find an amazing home for an amazing price, but if the location is terrible then you might just find yourself looking at new listings before you’ve even truly settled in. In fact, finding a neighborhood that best fits you can have a major impact on your overall happiness with where you live.
In fact, according to a survey by the National Association of Realtors (NAR), people would rather compromise on the condition and size of a home (20% and 18% respectively) than they would on the quality of a neighborhood (6%) and proximity to local schools (2%).
When looking for a good neighborhood, here are some tips:
- Ask your realtor for information on crime rates and schools in the areas you already have in mind.
- Take your commute times into account. You don’t want to spend more on gas than you have to.
- Visit prospective neighborhoods at different times of day and on different days. Sometimes a neighborhood can look pleasant as can be during the day, only to find out that during the night it is buffeted with the sound of loud cars, trains on nearby tracks, or barking dogs.
- Ask yourself, “Would I go walking in this neighborhood and feel good? Would I let my kids go out and play and feel safe about it?”
Make An Offer
If you’ve found a home you love and want to make an offer, then talk with your realtor about price. It can be hard to know what size of an offer to put on the table, but don’t worry. An experienced realtor will be able to talk you through the process.
Remember to ask your real estate agent to help you make a competitive offer that still sits within your price range. You don’t want to spend money that you do not have. Making an offer outside of your budget is like spending tons of money on a high quality race car… only to realize you don’t have enough cash left over to afford the gas.
Be Educated By Closing
Once you have found your dream home, then comes the “end game” of the house hunt. There is an entire closing process that will be gone through. It can take over a month to complete all the closing procedures. Your realtor will be able to handle a lot of the final steps.
As you get ready to close on the perfect home, read every document and ask your real estate agent about anything that might confuse or worry you. It’s important for this part of things so don’t forget! The contract will be signed by both parties. This means there are no guarantees if something is unclear until after they’ve gone through with it themselves.
Learn About The Area
Finding your new home is an exciting process, but it’s not enough just to look at homes – you need information about the neighborhood as well! Make sure that before moving in with all of its amenities and responsibilities. There may be things happening there like schools or parks; if so take time out for them by becoming involved now rather than later on when they’re more important than ever.
Your Research should include finding out what kind of house will best fit YOUR needs.
For example, Uintah real estate has a lot of newer homes with yards. If you don’t want a yard find an area that doesn’t have any.
Fresh And New Is The Place For First Time Buyers
If you’re ready to stop hoping for a home you’ll love and want to actually find it, then Fresh and New Real Estate is ready for you! Wether it is Uintah Real Estate or Ogden Real Estate, we are here to help!
We’re here to help new home buyers succeed in the home buying market! Our team of experts know how important it is for each client’s needs are met. If looking through real estate listings isn’t enough, we also offer other services tailored specifically towards what YOU need. That way, you have one less thing on your plate so that buying property can be as easy as possible.
Contact us today to get started. Let’s find your dream home today!