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|Tips for First-Time Homebuyers
Congratulations on your decision to join the ranks of millions of
contended homeowners. As you probably already know, owning a home is
a fabulous way to invest in your future and build financial security
for your family. New homes are exciting, and your eager anticipation
has probably already started to build.
However, the process of buying a home can also be
quite stressful. This is true not only for first-time buyers, but
also for veteran homebuyers. As the real-estate market changes over
time, lenders begin offering a growing variety of mortgage products
for every need. Consequently, you need to be prepared to make the
right decisions. Knowing exactly what to expect is a great way to
Being an educated consumer is always a smart move. When the purchase
is something as important and expensive as a new home, a solid
understanding of the home-buying process is your best asset.
If you feel stressed over the proposition of buying a new home, know
that you are not alone. There are many others who are in a similar
position and feel the same way. Fortunately, you have the power to
reduce home-buying stress.
Here are some of the most important things that you should do when
you are a first-time home buyer. Even if you have purchased a home
before, you might appreciate a refresher course on some basic ideas
that you may have forgotten.
Talk to Friends and Family
Some people might tell you that every situation is different, and
that therefore it is not a good idea to listen to advice. However,
it is always wise to seek the assistance and advice of people who
are familiar with the local real-estate market.
Turn to your friends and family members whom you trust. They can
provide simple referrals for realtors or home inspectors, giving you
one less thing to research! Take full advantage of your friendsí
knowledge, which they will be more than happy to share with you.
Asking someone who has recently purchased a home in the area where
you plan to live is advantageous, because you can learn from their
first-hand experience about common local practices. This doesnít
mean that you canít learn something from a friend in another state,
but because the real-estate market is segmented, the home- buying
process often varies by location.
Fire Up Your Computer
....it is important to know what you will need to do in order to
complete the purchase once you find the home of your dreams.
The internet is full of information about the home-buying process,
different types of mortgage programs and lenders, and even consumer
reviews of service providers. You can also find many homes available
for virtual showings, so that you can concentrate in-person visits
on the homes that interest you most.
Stick with names you know when looking for information online.
Otherwise, you may be tricked by false information and misleading
sales tactics. Fortunately, the benefits of looking at homes online
outweigh the disadvantages, and chances are you will find beneficial
information about the process of buying a home.
Most of todayís homebuyers report that they found their new home
through a realtorís website or another listing service. Looking for
homes online is a no-pressure way to identify what you do and donít
like about different homes. It is also a great way to save time.
When you browse home listings from the comfort of your own home, you
are better prepared when it comes time to schedule physical visits.
Talk to the Professionals
A ten-minute conversation with a real-estate agent or mortgage
lender can be priceless. Your realtor will be more than happy to
discuss the home-buying process in your area.
In the early stages of shopping for a new home, call several
mortgage lenders to learn about current mortgage rates and incentive
programs. Donít forget to ask about first-time buyer programs, which
can often help you save money now and in the future.
If you are a first time buyer, you may also be eligible to
participate in various programs that provide assistance with the
down payment or closing costs. Your local housing authority will
have information about conducting research and applying for
assistance through such programs.
Never Stop With the First Home you Visit
This does not mean that you should never buy the first home you
visit, but it does mean that you should do some comparative shopping
for your new home. Buyers who fall in love with the first home they
see tend to pay more for the home than they might have if they had
visited other potential homes. In addition, these buyers often
suffer from buyerís remorse, wondering whether they really purchased
the best home.
Of course, some buyers are absolutely thrilled with their home, even
if it was the only home they considered purchasing. Nevertheless, an
educated consumer is a wise consumer, so take your time to
investigate all the options available to you.
Learn the Ins and Outs of the Home-Buying
Carefully investigate every step of the home-buying process before
beginning your search for a new home. Sometimes the two actions must
happen simultaneously, but it is important to know what you will
need to do in order to complete the purchase once you find the home
of your dreams.
Review Your Debt To Income Ratios
This ratio represents your amount of monthly payments (bills)
compared to your average monthly income. Debt-to-income ratio is one
of the things mortgage lenders will look at when qualifying you for
a loan. Most lenders will prefer your debt not to exceed 20% of your
net monthly income. If your debt is more than 20% of your income,
it's time to pay down some of those bills. You'll have a much easier
time qualifying for a loan if you do.
Fix credit errors quickly.
If you review your credit report and find something that doesn't
seem right, go to the company's website who produced the report (TransUnion,
Equifax or Experian) to submit a correction request. These companies
are required by law to examine any reported errors on credit
reports, and to correct them if necessary. But the process can take
time, so you want to stay on top of it to resolve it quickly.
Get Pre-Approved for a Mortgage
Pre-approval lets you lock in a low interest rate, and it shows
sellers that you are serious about buying a new home. Work with a
lender as early as possible in the home-buying process.
Pre-approval also allows you to determine in advance what type of
home you will be able to afford. Find a lender who is willing to
discuss your individual situation and help you determine what
mortgage amount is best for you. These conversations will help you
determine whether or not a specific lender is right for you, as you
get a feel for the level of customer service that you can expect
throughout the sales transaction.
These suggestions should help you begin thinking about the
home-buying process and point you in the direction of various
resources that you can use to learn about buying a home.
Following the suggestions provided above is a great way to stay
excited and optimistic about buying your first home, because you
will be less stressed about the process when you know what to
If questions have arisen while you were reading the information
provided here, your real estate agent can help to explain and
clarify the steps mentioned above. Without a doubt, your agent will
be able to add to the list, too.
Buying a home is stressful, but it should also be fun. Get educated!
Your realtor is always available to help in the process of finding
and buying your new home. He or she has years of experience and
expertise to draw from while providing you with valuable information
that will make your life easier during the home-buying process.