Purchasing a home can seem like a stressful and intimidating experience, especially if it’s your first time. In fact, there are many first-time buyers who often go with the first acceptable home within their price range, or simply decide to continue to rent. This is understandable, as a home purchase is one of the biggest financial decisions in your lifetime – you want to make sure you do everything right.
One of the best ways to prepare is to simply take time to learn more about the buying process. In this page, we’ll take a look at some of the things you need to consider as well as a few helpful tips to make the process easier.
What type of home should you aim for?
You have multiple options to choose from – there are traditional single-family homes, condos, co-ops, townhomes, and multi-family dwellings. Every option comes with its own set of advantages and disadvantages, so it’s a good idea to take a closer look at your homeownership goals and what your lifestyle is like, so you can decide on an ideal property type to aim for.
How much mortgage will you be able to qualify for?
Prior to starting your house hunt, one of the most important things you should do is to determine how much you can borrow from a lender for your first home purchase. The amount you’ll be able to borrow depends on several factors, such as your current credit score, monthly income, outstanding debts, and how long you’ve been employed in your current job.
How can a real estate agent help you on your purchase?
A real estate agent can help you look for homes that fit your price range and requirements, and accompany you when you visit these homes. Once you’ve found a home you’d like to buy, your agent will assist you throughout various steps of the process, including placing an offer, completing the required paperwork, and getting a loan. An experienced agent will help you past any potential roadblocks and pitfalls you may encounter during the buying process.
Looking for a home
During your search, be sure to use every avenue available to you, including viewing online listings, driving around neighborhoods to look for “for sale” signs, and using your real estate agent. Let your friends, relatives, and business contacts know you’re searching for a home as well, as they may be able to offer a good lead or reference on a home.
Take a look at your financing options
First-time homebuyers can look into getting a Federal Housing Authority or FHA-backed loan, as well as other first-time homebuyer programs. There are many programs that offer down payments as low as 3% to 5%, and there are some that even offer zero down payment.
Consider getting a home inspection
Hire a professional to conduct an inspection on the property you’re considering, so its quality, safety, and condition can be properly evaluated. You don’t want to run the risk of ending up with a home that will require costly, unexpected repairs down the line.
In case the inspection reveals serious defects that the seller failed to disclose, you’ll be able to get your deposit back and rescind your offer. If your inspector finds defects after the seller accepts your offer, you have the option to re-negotiate to lower the selling price or arrange for the seller to perform the necessary repairs.