When you’re in the market to buy homes, it can be a daunting prospect if you’re a first-time home buyer. However, there are a wide range of tips and guidelines for you to follow that should make this process a simpler one. You’ll notice immediately that there’s a substantial amount of competition out there for home buyers, which means that you’re going to need to find ways to set yourself above other prospective buyers. With tour proven Systems for Success, we will help you find and purchase the home of your dreams.
Start Saving Early for Your Down Payment
If you’re looking to buy real estate and want to be able to purchase a home in the near future, it’s important that you start saving early for the down payment that you’ll need to make. If this is your first time buying a home, many types of mortgage loans allow for down payments that are as low as three percent of the sale price of the home. However, lower down payments typically result in higher monthly payments and interest rates for your loan. If you want the best rates possible, make sure that your down payment is 10-20 percent of the cost of the home. The best way to make a large down payment when you want to purchase a new home is to start saving as early as possible. If a home is at the top of your priority list, a substantial percentage of your monthly savings should be put aside for your eventual down payment.
Explore All of Your Down Payment Options
There are many different types of mortgage loans available for you to select from when you’re looking to buy real estate. Each loan comes with its own minimum down payment requirements. For instance, conventional mortgages that are sponsored by the government have a minimum down payment of three percent. On the other hand, FHA loans that are insured by the Federal Housing Administration require a down payment of 3.5 percent with a credit score of 580 or more. If you qualify for a loan from the Department of Veterans Affairs, it’s possible that you will be able to obtain this loan without making any kind of a down payment. VA loans do not have a minimum credit score requirement, but most lenders that fund VA loans have a minimum cutoff of 620. To qualify for VA financing, the borrower must have served in the military for a period of at least 2 years, and must obtain a Certificate of Eligibility Overall, it’s simply important that you take all of your options into account so that you make the right decision.
Determine What You Can Afford
Before you start searching for a new home to purchase, it’s essential that you have a firm grasp of what you can afford. Knowing how much you can afford before you begin your search will save you from wasting time by looking at properties that are outside of your price range. There are plenty of home affordability calculators online that will provide you with an estimate of what you can afford by obtaining some basic information such as what you expect your down payment to be and what you want your loan term to be. However, for the best and most accurate results, we advise you talk with a mortgage consultant who can advise you of the best finance options for you.
Make Sure That You Keep Closing Costs in Mind
Many new home buyers focus so much on saving for their down payment that they forget to make room in their budget for closing costs. If you don’t prepare for these costs ahead of time, it’s possible that the home buying process could be disrupted. The closing costs that you pay will be provided at the very end of the home buying process and are usually anywhere from 3-5 percent of the costs of the home. These fees usually include more than a dozen costs that cover everything from the home appraisal and inspection to the credit report and homeowner’s insurance.
Find the Best Agent to Help You Buy Your New Home
The real estate agent you choose to help you with the purchase of your new home is an important decision, for it is your agent who will be guiding you through the homebuying process, and will be looking out for your best interests and possibly save you thousands of dollars. The agent that you choose should have a fantastic reputation as well as an extensive amount of experience with real estate negotiations, finance and helping people buy and sell real estate. They also need to be very knowledgeable about the area and market that you’re shopping. Once you provide them with your search criteria and affordability, your agent will go to work searching the market and be able to provide you with options leading to the perfect home for you. Your real estate agent will play a very important role in your new home search, so it is crucial you connect with an experienced real estate professional who will be looking out for you.
Get Pre-Approved Before You Try to Purchase A Home
In today’s real estate market, Sellers expect Buyers to submit a pre-approval letter with their offer to purchase. The pre-approval letter verifies for Sellers that the Buyer is qualified to purchase the home. The pre-approval letter essentially provides an estimate of how much a lender may be willing to lend the Buyer for their new home purchase, which is based on the amount of debts currently owed as well as the Buyer’s amount of income. If you have a pre-approval letter in your possession, Sellers will likely consider your offer to be more serious and legitimate compared to other Buyers who have yet to take this step.
Select the Right Home and Right Neighborhood
Likely the most important element of buying a new home is to find the right home in the right neighborhood. For instance, you might want to select a home that’s relatively close to a reputable school system. You should also take a look at local crime and safety statistics to get a better idea of how safe the area is. Make sure that you know where the nearest hospital and grocery store area if you want to live nearby these oft-visited amenities. You could also think about driving through the neighborhood at different times of the day to gain a better understanding of the noise and traffic levels.
Make a Strong and Competitive Offer
If you’re noticing a substantial amount of competition while you’re searching for homes, among the most effective ways to set yourself above the other buyers is by making a strong and competitive offer, which is something that a real estate agent will be able to assist you with. While this offer should be within your budget and should never be too much higher than the value of the home, it’s wise to make an offer that could give you an edge in the event that the seller has received multiple offers. Your agent will know to include your pre-approval letter, along with a personalized letter introducing you to the Seller, when submitting your offer to purchase the home.
Connecting with the right real estate agent who can help guide you with the planning and preparation necessary for buying your new home is essential. Contact us today for a free consultation and let us help you get started with the purchase of your next home today.