The First Time Home Buyer's Guide to Buying
Are you a first time home buyer? Are you stressed? Confused? Not sure what to do? You are not alone.The housing market is on fire. But it’s a seller’s market, so buyers beware! Inventory is low, but demand is higher than ever. It’s not unusual for sellers to receive more than one offer. In fact, a single home in a seller’s market can receive upwards of seven to twelve offers. So where’s the best place to start? Here are several tips that can help you through the process of first time home buying. You can do this! We believe in you!
1. Figure Out What You Can Afford
You can do this by talking to a mortgage lender or using an affordability calculator, but always remember to aim low. Lenders usually provide you with a number that’s on the top end of your budget. Make sure you are comfortable with the number, and if possible, buy a home that still allows you to live your life the way you currently do. If you like to eat out several times a week, or travel the world often, make sure to buy a home at a price that allows you to maintain your lifestyle.
2. Figure Out the Best Loan Type for You
There are several different types of loans, which can make things confusing. Do your research, and figure out which type of loan is best for you. There are fixed-rate and adjustable-rate loans, each with their own advantages. There are conventional loans, as well as government-insured loans like FHA Loans, VA Loans, USDA Loans, and even First Time Home Buyer Loans. Each loan has their positives and negatives, but there’s one out there that will fit your needs better than the rest. Take your time, and figure out which one that is.
3. Find the Best Rate
Shopping for a mortgage is similar to shopping for a new car. You have to shop around the find the best deal. Interest rates vary from lender to lender, and so do other fees like closing costs. We encourage buyers to get quotes from several different lenders. It can save you a great deal of money in the long run, especially when it comes to interest rates, because we all know interest is what costs us the most.
4. Don’t Empty Out Your Savings
It doesn’t matter if you buy a brand new home, a home that was previously owned, or a renovated flip project. There will inevitably be something that needs to be fixed, replaced, changed, or updated. In preparation for buying your first home, make sure to save not only enough money for a down payment, closing costs, and moving expenses, but for future home repairs as well.
5. Be Careful With Other Purchases
Once you’ve found a house, put in a offer, and your offer has been accepted, be careful with your credit! Don’t open any new lines of credit, take out an auto loan, or make abnormal or large purchases (like furniture or appliances). Wait until after closing to do this! It’s important to maintain your current credit as much as possible. The lender’s mortgage decision is based on your credit score as well as your debt-to-income ratio. Applying for credit can reduce your credit score. Getting a new loan, or adding to your monthly debt payments, will increase your debt-to-income ratio. None of that is good from a mortgage lender’s perspective.
6. Get the Best Home Owner’s Insurance for Your Home
Don’t underestimate how much your home or your personal belongings are worth! Your property’s appraisal is important, but that alone is not enough. Take into consideration any improvements you make, as well as the value of your appliances, furniture, clothing and electronics. Make sure to account for everything that would have to be replaced
7. Maintain Both the Interior and Exterior of Your Home
Homes require a lot of upkeep. Some tasks are more important than others, but it all adds to the value of your home. Houses don’t come with an owner’s manual, so it’s important to do research and find out what all needs to be done to keep your home looking and feeling its best! And Rhino Shield can help!