Buying your first home? Here’s what you need to
know
You’ve made the decision to make one of the largest investments you’ll
ever make in your life-buying your first home. You’re excited, but at the same
time anxious. Some of the questions you may be asking are: Will I be able to
afford the home of my dreams? Do I have enough money for a down payment? Can I
get a home inspected before I make an offer?
Rest assured, you are not alone. According to the 2000 National
Association of REALTORS® Profile of Home Buyers and Sellers, first-time
homebuyers accounted for 40 percent of the homes purchased in 1999. The
homebuying process can be overwhelming, but if you go into it prepared, your
first purchase can be a good experience. Here are some things to consider before
making the plunge.
Getting a mortgage - Fear of being rejected for a home loan is one
of the main concerns for first-time homebuyers. To lessen the stress, you may
want to get pre-approved for a loan before looking at prospective homes. This
will not only help you feel more confident, it will also give you an advantage
when there are multiple offers for a specific home. The fact that your loan has
already been approved is of great value to the seller: because it shortens the
purchase process and there is less of a chance that the buyer will back out of
the sale.
Mortgage Payments - The costs involved in the purchase of a home
can be overwhelming to first-time buyers. However, with the help of a real
estate professional, you can calculate out how much they you be able to pay each
month in mortgage payments, and from there, what prospective homes offer a
feasible payment plan.
Down-Payment - The down-payment amount varies depending on the
value of the home you choose and your mortgage lender. And in some cases,
first-time home buyers can purchase a home with no money down. Although it
varies from state to state, most offer government-funded programs for first-time
buyers that help people buy a home with no down-payment. Your real estate
professional will be able to explain the different options available to you.
Closing Costs - First-time buyers often forget to consider the
closing costs when making an offer on a home. Paying closing fees of up to 10
percent of the home sale amount is not unusual. Add that to the down-payment and
you’ll have quite a sum to raise before the final papers can be signed. However,
a smart first-time buyer takes this into account before making an offer, and
with some professional help, the costs can be estimated in advance.
Making offers - Don’t feel pressured into making an offer on the
first home you see. This is a common mistake of many first-time homebuyers. Make
sure you view different homes to get a feel for the marketplace. When you do
decide on a home to make a bid on, work with your real estate professional to
get all of your questions answered first before making an offer. But don’t wait
too long to make an offer. The longer you wait, the greater the chance other
prospective buyers may place offers, making it harder for you to negotiate a
good deal.
Condition of the Home - Buying a “problem” home is another fear of
first-timers. A home that needs major repairs can become a costly venture. And,
unless the asking price is adjusted to reflect the hidden repairs needed,
chances are the home is not worth as much as the seller is asking for it. To
avoid unfortunate surprises, your real estate professional may advise you to
hire a home inspector before making a serious offer. That way, you know what you
are getting into.
Above all, remember that there are no silly questions. Make sure you
understand and are comfortable with every aspect of the transaction. Your real
estate professional can be an invaluable asset in helping you make educated
decisions so that your first-home purchase is a rewarding experience.
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