It’s hard to believe that buying your first home can be both scary and exciting at the same time, but it’s true! From deciding where you want to live to figure out how you’re going to finance your new home, there are plenty of aspects of homeownership that aren’t so fun. However, that doesn’t mean you have to shy away from this life-changing event! With these eight essential tips before buying a home, you’ll know everything you need to successfully leap into homeownership with confidence.
1) Get pre-approved by a lender
Getting pre-approved is different from actually getting financing; with pre-approval, you’re just telling your lender that you’re good for a certain amount of money. They don’t give you any cash. This will let you know exactly how much house you can afford before even beginning your search. The better informed you are, the more likely it is that buying a home will be smooth sailing (and not full of surprises). If purchasing your first home is still in question, get started by figuring out if it’s right for you! Then find an advisor who can help guide you through what should be an exciting but also nerve-wracking process: buying your first home!
2) Check your credit report and score
Get your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) at least once per year. Make sure there are no errors on any of your reports, then check your credit score(s). If you have a low or nonexistent credit score, fix it before moving forward with home buying. It’ll be harder to get loans (mortgages) if you have no credit history. (Source: Trulia)
3) Find your perfect location
Finding your perfect location is key since you’ll need to spend more time at home once you start living there. The last thing you want is to walk in and feel like it’s not even your own space because you’ve never been there before, so make sure you go through every room and imagine what it would be like if all of your furniture was already in place. Once you find a home that has everything that meets your needs, buy it! Do not wait because other people will beat you to it.
4) Understand local housing market conditions
If you’re looking for your first home, it’s important to understand local housing market conditions. Make sure you talk with other homeowners about their experiences buying in your neighborhood and also consider checking out some blogs written by real estate agents and brokers in your area. This will help ensure that when you find a home, it’s not overpriced and that there are enough buyers interested in what you want. Getting up-to-date data on the current market value of homes sold near yours can give you peace of mind knowing that what someone is asking isn’t significantly higher than what they’ve recently been selling for. That way, you know it’s an opportunity not a risk when it comes time to make an offer on a home.
5) Shop around for a mortgage lender or broker
While it’s wise to get your finances in order before purchasing a home, you should also be prepared for potential delays during the financing. In many cases, even if you have good credit and a strong income, buying a home can take several months because of additional paperwork required by lenders. It may take longer if there are issues with your credit or other factors that affect your ability to close on time. As such, it’s important to ask about any special financing requirements at least six months before you want to close on your home. It will give you time (and ensure) that everything is in place so that no hiccups occur during closing.
6) Inspect the property
This is an absolute must before buying any property, but it’s particularly important when you’re buying your first home. Look at all of its features the kitchen and bathrooms, hardwood floors or carpeting, washer and dryer, heating and cooling systems, etc., and then make sure everything is in proper working order. Inspections generally cost around $400–500 and aren’t required in all states, but they are strongly recommended if you are trying to buy your first home. And remember: Your biggest investment should not be something you take lightly. If that sounds excessive or inconvenient and if you don’t want to do it you might want to reconsider buying a house right now.
7) Know about home buying scams
Most people buy a home every few years, so, naturally, you want to find ways to save money on your purchase. Unfortunately, scammers have figured out how to capitalize on that. For example, they might call offering pre-foreclosure deals or tell you they’re with a government program that can help first-time buyers. No matter what deal sounds too good to be true it probably is. Make sure you understand all of your options for buying a home and always do your research before making any decisions the consequences could be dire if you don’t.
8) Be prepared for financing delays
One of the biggest mistakes many home buyers make is that they get their hearts set on a house and then jump into financing. Don’t do it! Unlike many other purchases, such as electronics or kitchen appliances, where shoppers can walk away from their purchase if they’re unable to secure financing, buying a home is more complicated. If you’re not pre-approved for financing and don’t have 100% of your down payment, you will likely lose your bid on a house if multiple offers are being made. Be prepared for financing delays by staying organized, thinking through your financial situation thoroughly, and making sure you have ample time between submitting an offer and closing on your house.
Owning a home can be one of life’s greatest joys, but it also brings great responsibility. As with any large purchase, there are numerous issues to consider before you make an offer on that house in your favorite neighborhood. Use these eight tips as your guide while buying a home. Even if you don’t buy right away, review them now so you know what questions to ask when it is time to move into your new abode.