Being a first-time homebuyer can be intimidating. There are so many steps involved, from the preparation, to the house hunt, to finally ironing out all the details and purchasing a home.
To help you out, we prepared some home buying tips to help you as you go along the process of getting your first home.
- Preparing to buy
- Choosing a mortgage
- Shopping for a home
- Buying your first home
- Choosing the right real estate agent
Before you purchase a home, you have to consider all the costs involved – the bulk of the expenses are for the down payment, closing costs, and the expenses upon moving in. It’s important to start saving up as early as you can; the sooner you start, the sooner you can afford a house. When you think you’ve saved up enough, figure out how much you can safely spend based on your income, credit score, and projected expenses.
Your down payment depends on the mortgage type as well as the terms agreed upon with the lender. Some loans for first-time buyers have down payments as low as 3%, but this can vary. However, the higher your down payment, the lower your interest rate.
Closing costs are the fees incurred for finalizing your mortgage – this typically falls between 2% and 5% of your loan. Some sellers agree to pay a portion of your closing costs; you can ask your seller later on regarding this. Move-in expenses are for home repairs, upgrades, renovations, and purchases.
Build your credit score because your mortgage approval and the interest rate will depend on it. You can strengthen your credit score by paying bills on time, keeping your card balance to a minimum, keeping your cards open, and checking your credit reports for any discrepancies that could affect your score.
There are various mortgage types available, each with their own requirements and qualifications. For first-time homebuyers, a lot of states and cities offer low-interest mortgages and down payments as low as 3%. Some programs also offer assistance with closing costs.
It should be noted that there are several options for mortgage terms. Typically, there are 15-year and 30-year fixed-rate mortgages. A 30-year mortgage has a smaller monthly payment than a 15-year one, but the interest rate is higher. Decide on which works best for you based on your financial capacity and long-term stability.
When you’re ready to start the hunt, get a mortgage pre-approval from the bank or lender. This shows that you’re qualified to take out a loan and that you’re prepared to buy the house. This will give you an edge over other potential buyers who aren’t pre-approved.
It’s important to choose the right neighborhood and housing type, and to weigh out the pros and cons of each one.
A single-family home might be pricier than a townhouse, but the trade-offs are space and privacy. On the other hand, a detached house will entail more maintenance and upkeep than a condominium. Also take into consideration any homeowners’ association fees that come with the neighborhood.
If possible, visit the house in person. While virtual home tours are very convenient and have become a thing as of late, they don’t really cover all the details that an actual visit will. An actual tour will allow you to observe the adjacent properties, check for noises in the area, and notice any odors that might come from nearby factories or facilities.
Once you’ve decided on the house you want, have it checked by professional inspectors. They will assess the structure for any potential problems. Checking for molds or pests doesn’t come with a standard inspection. But if you think such issues may evolve into potential threats, the additional cost of specialized inspections might be worth it.
Try negotiating with the seller to share the expenses for the closing costs and any needed repairs. To prepare for any contingency, it is also advisable to have home insurance. Buy enough home insurance to cover the costs in case your home and belongings are destroyed.
When purchasing a house, whether for the first time or the fifth, it’s important to have a good real estate agent. Pick an agent that knows the local real estate market well, and one that can guide you through every step of the hunting and buying process.
Our agents at Coldwell Banker Traditions can help you with buying a home in Virginia’s Williamsburg, New Kent County, and the Hampton Roads area.
With our knowledge and expertise of the local market, we can help you look for the perfect home, and negotiate for the best deals. For more information, contact 757.229.9595 or info(at)cbtraditions(dotted)com. You can also leave us a message here.