7 Things Every First-Time Homebuyer Needs to Know
Shopping for your new home can be one of the most rewarding and exciting times in your life. When you consider how much time you’ve spent imagining what your dream home looks like, it’s equally important to spend just as much time planning for the purchase of a lifetime. Before you start searching for homes, it’s important to do your homework, spend time researching your options and set clear goals upfront.
We’re here to help you start your home buying journey with confidence! Here are 7 things every first-time homebuyer should know:
- Get pre-approved before you start searching for homes. By getting a letter of pre-approval before you start searching for homes, you’ll be able to determine how much you’re eligible to borrow and set realistic expectations regarding what type of house you’re looking for and how much you’re willing to spend. Not only will this help you save time by looking at the right homes early on, there are many more benefits of getting pre-approved.
- Start preparing your financial documents now. By getting smart on the financial factors that will be considered during application, and gathering all of the documents needed for pre-approval ahead of time, you’ll be able to streamline the application process and have a head start when it comes time to put an offer on your dream home.
- Be careful with your credit. When you apply for a mortgage, your lender will look at your financial history, including your use of credit and debt obligations. Make sure you keep your credit card balance below 50% of your total available credit limit and try not to open any new lines of credit during this time. Remember, you want to paint a stable picture for lenders and demonstrate responsible credit habits.
- Scout the neighborhood. During your home search, take some time to experience the local community. Does it have everything you want in a neighborhood? Some things to consider include commute time, walkability, school district, crime rates and property taxes. Some of these factors may be more costly than you expect. Here’s a list you can use as you rate your potential new home.
- Master the art of negotiation. As you get closer to putting an offer on a house, be prepared to negotiate. You’ll want to take a look at the marketplace and consult with your realtor on how to make a strong offer that will stand out. Be sure to ask your realtor about comparable homes in the area to get a better idea of what an acceptable offer might be.
- Don’t use all of your money for a down payment. It’s always best to set aside some money to help manage the finances of a new home, including maintenance, upgrades or repairs that need to be made. Do your best to estimate what these costs might be and account for them in your budget.
- Spend time shopping for the right mortgage lender. When you’re ready to look for a mortgage lender, compare each lender’s “Good Faith Estimates,” and make sure you look for a lender that you trust. Sometimes, finding a loan officer is really like choosing a friend. It always feels better to have a friend by your side.
Good luck with your house hunting and stay positive through the process. Take your time to find a home you’ll love and be sure to follow the tips listed above. If you do, you’ll be setting yourself up for a smooth and successful home buying experience.
Have questions about getting started? Leave a comment below or send us a message. We’d be happy to help you take the next step in your home buying journey.