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During the thrill and excitement of purchasing a home, home buying tips are not often considered. However, there are a number of tips for first time home buyers that can streamline the process and make things much easier. To get the absolute most out of the experience, be sure to pay close attention to the following first time home buyer tips.
1. Know Your Budget
The process of buying a home is not a time for wishful thinking, it is a time for realism. The first step towards buying a house is determining just how much you can realistically afford. The better the idea you have for what you can actually afford, the easier your house search becomes. Don't fall into the trap of only considering your monthly payments and your initial down payment. Consider additional expenses, such as property taxes and homeowner's insurance to give yourself a true picture of what lies ahead.
2. Have Your Credit Score On Hand
While it is not the sole determining factor in your home buying adventure, your credit score will go a long way towards determining what kind of loan you are eligible to receive and what interest rate you can expect. Gather this information early, so that you can find out if there are any discrepancies that need to be rectified before your initial meeting with the mortgage broker. The higher your credit score, the more options you have.
3. Consider Every Option
When it comes to purchasing a home for the first time, there are a variety of options that are not always considered, options that could allow a potential homeowner to save a bundle. Take a closer look at some foreclosure properties in your area if you are looking to save money and focus on neighbourhoods with a large number of properties for sale when you are in search of ways to get the most possible bang for your buck.
4. Decide On Your Requirements
Even if you have not ventured into the home buyer's market before, there is a good chance that you already have a strong idea of what you want. The more you know about what you are looking for, the less time you will waste, so sit down and decide on all of your most crucial requirements early, as this will keep you from running into potential deal breakers later in the process. Separate your needs from your wants in order to further streamline the process and remove the guesswork.
5. Research Your Down Payment Requirements
Knowing exactly what type of house you want and having a strong idea of where you stand with lenders is great, but unless you know exactly how much you can afford to spend on an initial down payment, the earlier points are all moot. One of the most obvious home buying tips is to have money already set aside for a down payment before embarking on the shopping process, if you have at least 20 percent of the home's total cost on hand, you will save the additional fees that mortgage insurance incurs. However, there are programs available that require 0 down and as little as 1% down.
6. Hire An Agent Who Knows The Area
You may think that you know the area that you are considering, but your level of expertise is no match for that of an experienced real estate agent. They know the area inside and out and have the ability to direct you to the least expensive neighbourhoods, as well as provide you with the latest developments. If there are any issues that may arise as a result of your move, they are able to offer any necessary assistance.
7. Learn The Neighborhood
Don't simply pick the neighbourhood that looks best on paper and call it a day. Even the most beautiful neighbourhoods can have their drawbacks and a thorough investigation of the area is crucial. Take time out to visit the neighbourhood during different times of the day, so that you can find out valuable information about traffic, crime and proximity to work/school/stores of interest.
8. Have All Documents Ready
Once you've reached a point where you are ready to have meetings with loan officers, the worst thing that you can do is not be fully prepared. This is one of the most crucial financial decisions that you are ever going to make, so have all of the required documentation at the ready. This includes your credit report, your past tax returns and your pay stubs. By being proactive, you can fix any problems that need to be taken care of well ahead of time.
9. Don't Make Major Purchases
If you're a first time home buyer, it is best to hold off on any sort of big ticket purchases in the months leading up to your purchase. Those who add a new lease or loan to their roster of monthly bills are negatively increasing their debt to income ratio and since this number directly influences your ability to get a loan (and the interest rate of said loan), it is in your best interests to steer clear of any large purchase that requires the use of credit.
10. Keep Your Funds Seasoned
A wide range of lenders will want proof that the money you are using for a down payment has been properly seasoned. This means that the payment amount needs to be sitting in your bank account for a set amount of time before applying for a loan. Know what these conditions are before you begin the process so that you are fully aware of the requirements.
Our team of licensed Maryland Realtors and Mortgage Brokers here at Buy a New Home in Maryland are here to assist you in any way possible. Fill out the contact information form or give us a call at 443-605-5977 if you would like further assistance.
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