When first-time homebuyers are finally ready to take the big step, it can be an exciting whirlwind of ups and downs.
It’s an amazing experience, but can also be nightmarish if you don’t know what you’re doing. Following a first-time home buying guide is a necessity to avoid being taken advantage of and making common home-buying mistakes.
Keep reading for a quick guide on what you need to do as a first-time homebuyer!
First-Time Home Buying Guide
As you read through this guide, remember that buying a home requires patience. This is true for people buying their first or tenth home. Between financing, inspections, and negotiations, it can take time and become quite stressful.
However, keeping in the right state of mind and taking the right steps can go a long way towards making your experience as smooth as possible.
Check out these five steps!
1. Have a Good Credit Score
First, to get approved for a home of higher value, you must get your credit score in an optimal position. A poor credit score will significantly limit the homes you are approved to buy.
To improve your credit score, pay down your debts, especially the high-interest ones. Additionally, make sure none of your credit cards are maxed out. Finally, never miss or default on payments.
2. Get Preapproved
Next, on your home-buying guide, you need to get preapproved for a loan before you start house shopping. This can save you a lot of headache and disappointment down the road.
The last thing you want to do is fall in love with a house you can’t afford. Go into house-shopping knowing exactly where you stand financially. This will narrow your field and help you know what to expect.
If you aren’t approved for enough money, perhaps you need to wait six months until your financial situation improves.
3. Save Up for a Down Payment
Saving up for a down payment is a very important step in the home buying guide.
While some types of loans will allow you to use a very small down payment or even no down payment, it’s more common to put 5-15% down.
While it seems like a hassle and even a financial burden, a down payment actually saves you money in the long run by lowering your interest on the loan.
4. Don’t Max Out Your Budget
One of the biggest mistakes new and veteran home buyers make is maxing out their line of credit. For example, if they’re approved for a $250,000 home, that’s exactly what they look for.
Instead, consider this tip in our home buying guide — buy a home well under your max approval amount. Doing this will help you get a comfortable mortgage rate, making sure you’re not struggling to make your payment each month.
5. Hire a Good Buyer’s Agent
Next, you want to make sure you hire a good and reputable buyer’s agent. This is a must for any new home buyer.
A buyer’s agent knows the ins and outs of the market. They know what good and bad things to look for in a house, and whether or not the house is worth the asking price. A good buyer’s agent is well worth the cost.
Go House Shopping
Finally, now that we’re at the end of our home buying guide, it’s time to go shopping!
Remember what you’ve read here today and be patient! It’s also important not to get emotionally attached to any home until you know you’re offer has been accepted and everything checks out. Trust us, it will save you a lot of heartaches.
If you’re ready for some professional real estate buying help, you can schedule a free consultation with us right now!