First Time Home Buyer Tips

Are you considering becoming a first time home buyer?  Buying a home can seem daunting and overwhelming but exciting all at the same time.  It is important to prepare for your first home purchase if you want to have a successful experience.  Here are just a few simple tips to help fulfill your homeownership goals. 

Savings: Having money saved in the bank is the best tip to start with. Home purchase expenses to consider: 

• Down payment – the bigger your down payment, the lower your monthly cost.  Putting 20% down or more on a home purchase can save you from having to pay mortgage insurance.
• Closing costs – when purchasing a home, you will have closing costs which can range depending on your location and what type of financing you are obtaining for your purchase 
• Moving costs – anytime you move, you have moving costs to consider, truck rentals, utility set up fees, etc. 

Budget: Having a budget is important when considering a home purchase.  You need to know what you can afford in monthly housing cost and be able to still have money to include in an emergency fund and home maintenance fund.  I personally like buyers to also consider long term future goals in their budget so retirement funds are always on my first time home buyer budget sheets.  It is important that once you determine your budget, you stay within that budget. 

Things to consider including in your budget:

• Monthly mortgage payment 
• Emergency fund 
• Home maintenance 
• Retirement 
• Home utility costs 
• Food 
• Entertainment 
• Automobile cost 
• Credit cards / personal loans 

Credit: Having a great credit score is a necessity for a home purchase.  Knowing your credit score is the first step.  I recommend obtaining a free copy of your credit report by reaching out to all three credit bureaus: Experian, Equifax and Transunion.  A mortgage lender will use a tri merged credit report that will include all three of these bureaus.  Once you have your free credit report, review it to ensure that there are no errors and if you find an error dispute it to have the issue resolved. 

Increasing your credit score is as easy as: 

• Paying your bills on time 
• Keeping your credit usage low – do not max out your current credit accounts and do not close out accounts as you pay them off
• Keeping credit inquiries to a minimum 

Secure a Professional Real Estate Team: Start by obtaining a real estate agent that is a professional Realtor that has experience in their field to assist with the search and negotiation of a real estate purchase.  A real estate agent should have knowledge of other professionals that they can refer you to to assist in the home purchase process and ensure a smooth, successful experience.  

Your team should consist of the following professionals: 

• A Mortgage Originator should be knowledgeable in their field and be able to provide you with any information on first time homebuyer assistance programs in your area and the different loan products available to buyers. This should ensure that you obtain the loan that fits your personal needs and budget. 
• A Home Inspector should be experienced and know all aspects of a home from the roof to the basement and everything in between.  I personally recommend attending your home inspection to learn about the home you are purchasing. 
• A Home Insurance Agent should be familiar with all insurance products available to you to ensure that you have the coverages needed to protect your personal belongings and the biggest purchase you may make in your life. 

These are just a few items to consider.  If you would like to discuss your personal goals of homeownership, we would love to hear from you.