Choosing your real estate professional is one of the most important decisions you will make when buying property. The more you look around, the more you will see the value of working with us.
However, no matter whom you choose, these simple tips will help you find and purchase the home of your dreams more quickly and efficiently. If you’re a first-time buyer you can find more information here.
Before you shop:
- Be a smart consumer. Learn the financing basics. Know how to shop for a home loan that’s right for you.
- Get pre-approved. This takes very little time and lets you know the price range that fits your lifestyle.
- Know what you want. The last thing you need is to close a deal and realize you bought a house you don’t want. Ask yourself what you’re looking for in a home, before you shop. Think about size, commute time and necessary repairs.
- Keep your debt load to a minimum. Don’t make major purchases or incur any additional debt until after your purchase. Pay down credit cards and don’t apply for new ones. Remember, financial institutions evaluate your financial situation on your gross monthly income. Your total monthly house costs should not exceed 28 percent of your gross monthly income.
- Be prepared to view new properties quickly. Sometimes homes sell quickly, so be ready to make fast decisions. Be accessible to change the terms.
- Have instant access to your agent. Instant communication can mean the difference in purchasing the property of your choice.
Before you buy:
- Submit a strong competitive offer.
- Include a substantial earnest money deposit. Sometimes offers are accepted based on the amount of the deposit.
- Try to minimize the number of contingencies. Fewer contingencies mean a stronger offer.
- Hire an inspector. A professional building inspector or appraiser will make sure the house of your choice is in satisfactory condition.
- Check zoning regulations and covenants. Good residential neighborhoods will be zoned to keep out commercial and industrial users. Read any restrictive covenants and make sure they fit your lifestyle.
- Request an updated property survey. Be sure it clearly marks boundaries. Check for problems.
- Make sure you know what stays or goes.
- Your contract should be very specific about which items (appliances, etc) are included in the sale.
- Get agreements in writing. Make certain verbal agreements are written into the final contract to avoid any stressful and expensive issues later.
First-Time Home Buyer Tips
Buying a home is a complicated process even if you’ve done it before. For first-time homebuyers, navigating the process can feel a bit overwhelming. With so many things to think about and various important decisions to make, it can be difficult for buyers to confidently choose a home, know what to bid on it, understand if they are getting a good deal, and so much more.
The good news is that choosing the right home doesn’t have to be difficult when you educate yourself and get help from experienced real estate agents who know the market in your area. Here’s what you need to know when purchasing a home:
Common Mistakes that Homeowners Make
Every first-time home buyer makes some mistakes along the way. We’re going to share three common mistakes that you should avoid.
• Only talking to one mortgage lender: Talking to one lender leaves no room for comparison. As such, you likely won’t lock in the best rate and could essentially end up paying more. Generally speaking, buyers should shop between about three lenders.
• Buying more home than you can afford: Buying more house than you can afford will leave you with monthly payments that will be hard to keep up with and can affect your finances long-term. Keep in mind that if your monthly mortgage payments are so high that you can’t put money in savings, the first major home repair you need to make could be financially devastating. Buyers should set a realistic budget and aim to stay under it.
• Looking for a home before getting pre-approved: You might be excited to start your home search, but you need a pre-approval letter to know how much of a purchase price you can afford as well as to be seen as a serious buyer.
Preparing Yourself for Buying Your First Home
One of the first things that buyers should do is save money and eliminate debt. Be sure to start saving as early as possible so that you can afford the best home in your price range and still have enough room in your monthly income to set aside for home improvements, repair costs, homeowners insurance and your overall financial goals.
Set up automatic payments so you can pay bills on time without thinking about it. And with every credit card you pay off or pay down, your credit score goes up and so does your buying (and saving) power.
Speaking of saving up, buying a home comes with a wide variety of expenses that you’ll need to be ready for, including the down payment, closing costs, and other fees. And if you aren’t able to make a down payment of at least 20% of the home’s purchase price, the lender will require you to pay for private mortgage insurance.
Another important step is to check your credit report and deal with any discrepancies you find there so you can raise your credit score as soon as possible. This will be one of the biggest things that lenders take into consideration when determining your eligibility. Also, a higher credit score will help you secure a mortgage with a better interest rate.
Lastly, do your research. Determine what kind of community you want to live in, see what the job market has to offer, and research anything else that is important to you so you can make more educated decisions right from the start.
Most Important Things When Buying a House
• Supply and demand: Homes are appreciating as more people are interested in purchasing a home. This means that not only are home prices rising, but the supply of homes can’t keep up with demand. Before starting your home search in a competitive market, consider finding a trusted real estate agent to help you throughout the home buying process.
• Down payment: The down payment is one of the biggest obstacles for homeowners today. Unfortunately, many first-time buyers do not have a lump sum of cash to put down on a home. This is coupled with the fact that many buyers are trapped in student loan debt, making the dream of homeownership even more difficult. Thankfully, there are programs such as Fannie Mae and Freddie Mac that offer down payment assistance. With that said, aim to put at least 20% down to increase your chances of getting approved and lowering your interest rate. However, you can sometimes find a mortgage lender that will accept 10% down and even 3% — just keep in mind that with most conventional loans, you’ll have to pay for private mortgage insurance if you make a down payment of less than 20%.
• Choose the right layout: A home is a big investment. With that said, it’s important to consider the home layout that works best for you and your family. The last thing you want to do is feel stuck with a home that isn’t as functional as you thought it would be.
There are a lot of steps involved in purchasing a home. As a first-time home buyer, knowing what steps to take can help you have a more seamless buying experience. If you’re preparing to buy your first home in Enterprise, AL, contact Team Linda Simmons today!