First-time home buyers accounted for nearly 80 percent of all home sales last year. Even as the housing market seemed to slow down, first-time buyers were still busy on the market.
The pattern is likely to hold in 2019, and you may be among the people purchasing their very first home.
Buying your first house can be an intimidating process because there’s so much you need to learn. That’s why we put together this guide. As a first time home buyer, these 10 tips can help you navigate the process with confidence.
1. Think Long-Term
The first of our home buying tips is to think about tomorrow. If you’re planning to move again within the next couple of years, you may not want to buy a home. Renting may be a better option.
It’s also tempting to first time home buyers to think only of today. You might be content with a one-bedroom house now, but what if you plan to start a family? So long as you can afford it, it’s better to buy a property you can grow into.
2. Get Your Down Payment in Order
Most first time home buyer tips will tell you to start saving for your down payment as soon as possible. If you’re already thinking about the sale, it’s more than high time to start saving.
Keep in mind that you may need to season your down payment funds. This means your down payment has to have been in your account for so many days before you make a purchase.
Keep in mind that many first time home buyers put down much less than 20 percent. Programs directed at first time buyers may make buying with a low down payment possible.
Higher down payments do have their advantages. They’ll lower your monthly payments, and they could help you pay lower insurance costs.
3. A First Time Home Buyer Should Work with a Local Agent
Whether you’re moving to a new city or buying in an area you’re familiar with, it helps to have a local real estate agent.
Their expertise can help you manage the buying process with ease and confidence. They can give you insight about certain properties or neighborhoods. They also know the steps in the process, so they can walk you through it.
Their advice could help you get more out of your dollar or find the right neighborhood.
4. Explore Your Financing Options
You’ll probably need a mortgage, and you’ve heard all the mortgage tips for buying a house. Make sure you talk to many lenders. Don’t forget to get pre-approval before you start shopping.
One thing first time home buyers may forget is that they have many financing options. You should check in with the Federal Housing Administration about loans.
If you qualify for a loan from the Department of Veteran Affairs, you may not even need a down payment.
There may also be assistance programs in your state or county. Be sure to explore these programs as well. They could provide the financial help you need to make a home purchase.
5. Don’t Forget Extra Costs
One thing for first time home buyers to remember is extra costs associated with the home sale. Closing costs are the best example. You’ll need to pay a percentage to close the mortgage.
You might also forget about move-in expenses. Factor small improvements like new paint or updating fixtures into your budget.
6. First Time Home Buyers Must Remember to Negotiate
As a first time home buyer, it’s easy to be overwhelmed by the home buying process. After all, it’s your first time going through the steps and everything is new.
You may not feel confident negotiating, even if there are major repairs needed or the seller wants to close the deal fast.
You don’t need to negotiate only the price of the property either. You could ask the seller to cover the costs of a home inspection or other closing costs, for example.
Negotiating can result in major savings, so don’t be afraid to ask for more.
7. Shop for Home Insurance
Once you’ve bought your new home, you’ll want to insure it. You should go insurance shopping well before the closing date of your purchase.
One good reason to do this early in the process is to get an idea of what it will cost to insure the house. You may also be able to discover extra insurance needs, such as flood insurance. You may even be able to check previous claims made on the property.
Next, having a quote in hand means you can insure your new home quickly when the deal goes through.
8. Check Your Credit Score
You may not think about your credit score, especially if you’re pre-approved. It’s a good idea to keep an eye on it during the home buying process, though.
Pre-approvals do expire. The lender can also conduct a credit check before they grant the pre-approved loan. If you’ve recently made a big purchase or missed payments, it could hurt your chance of getting the mortgage you need.
Be sure to check your credit before shopping for a mortgage. Once you begin the buying process, stop any other large purchases to make sure your score is as high as possible.
9. Know What’s in a Home Inspection
As the buyer, you’ll likely be responsible for booking a home inspection. You’ll also be responsible for paying for it.
Not all home inspections are created equal, so be sure you know what you’re paying for. Ask if the inspector will look for mold or test for radon.
You should attend the inspection and ask questions. Encourage the inspector to take a closer look and access all parts of the house.
10. Apply for a Homestead Exemption
Almost all states have something called a “homestead exemption,” which can help you at tax time. It reduces the value of your primary residence, which lowers your taxes.
Check the rules in your area and be sure to file by the deadline in your state. If you don’t, your mortgage may increase.
Make Buying Easier
As a first time home buyer, you have a lot to learn. These 10 tips will help you as you navigate the home buying process for the very first time.
If you’re already looking for financing for your first home, get in touch with us. We can help you find the right financing for your new home.