BEFORE YOU BUY A HOME !
First time homebuyers, before you begin shopping for real, you need to create you dream house checklist that specifies: price, type of property, condition of the house, must-haves, should-haves, and location.
You will must likely have to make compromise. Your dream sweet house will become your reality check
what dream house can you afford ?
Make sure to include the cost of commuting into your monthly budgeted consider the pros and cons of on your lifestyle.
DOS
!- Check your credit score and work on it
2- Determine a budget
3- get your asset in place
4- Shop multiple lenders
5- Hire a real estate agent
6- Put contingencies in writing
7- Keep status quo in your finances 12+ months out
8- hire a lawyer
9- Get Pre-approved for a mortgage
10- Look for your dream home
*Understand there is more to home buying process than the mortgage payment
DON’T
5 FIRST-TIME HOMEBUYER MISTAKES TO AVOID
Thinking about buying your first home? Before you can unlock the door to homeownership, you have to take some important first steps. From finding the perfect location to financing your purchase, shopping for your first home has challenges that go beyond curb appeal and interior features.
Some of the important steps to homeownership include:
Getting approved for a mortgage.
Choosing the right real estate agent.
Finding the right home that fits your budget.
Here are five common mistakes first-time homebuyers should avoid.
1- MORE TO IT THAN MORTGAGE PAYMENTS
Many first-time homebuyers decide to buy when they
feel ready for a mortgage. But just because they can
afford the mortgage payments doesn’t mean they can
afford to own a home.
“They have an idea of what their mortgage payment is going to be, but they don’t realize there’s much more to it.
Property insurance, taxes, homeowners association dues, maintenance, and higher electric and water bills are some of the costs that first-time homebuyers tend to overlook when shopping for a place.
Keep in mind property taxes and insurance have a tendency of going up every year. “Even if you can afford it now, ask yourself if you’ll be able to afford the increased costs later.”
2. LOOKING FOR A HOME FIRST AND LOAN LATER.
Homebuying doesn’t begin with home searching. It begins with a mortgage pre qualification and pre-approval — unless you’re lucky to have enough money to pay cash for your first house.
Often, first-time homebuyers “are afraid to get pre-approved. They fear the lender may tell them they don’t qualify for a mortgage or they qualify for a loan smaller than expected. “So they pick a price range out of the sky and say, ‘Let’s go look for a house.
And that’s not how it should be done. Yes, it’s more fun to go look at houses than to sit in a lender’s office where you have to expose your financial situation. But that’s a backward approach.
“You get pre-approved, and then you find a home
“That way, you’ll make a financial decision versus an emotional decision.”
3. NOT GETTING PROFESSIONAL HELP
New to the homebuying game? You’ll need a reputable real estate agent, a good loan officer or broker, and perhaps a lawyer.
Venturing into this process alone, without professional help, is not a good idea. While every rule has its exception, generally, first-time homebuyers should not try to deal directly with the listing agent.
If you are getting divorced, are you going to go to your husband’s attorney for help? Of course not, Same here. If you go to a listing agent, they are only going to show you their listings. You must find a buyer’s agent to help you.”
If you hire an agent without a referral from friends or family, ask the agent to provide references from previous buyers. The same goes for loan officers or mortgage brokers.
“It’s very hard for first-time homebuyers because they don’t know who they are dealing with.”
It’s crucial to find a professional who will give you “truly independent advice. Sometimes that means hiring a lawyer.
4. USING UP SAVINGS ON THE DOWN PAYMENT
Spending all or most of their savings on the down payment and closing costs is one of the biggest mistakes first-time homebuyers make.
“Some people scrape all their money together to make the 20 percent down payment so they don’t have to pay for mortgage insurance, but they are picking the wrong poison because they are left with no savings at all.
Homebuyers who put 20 percent or more down don’t have to pay for mortgage insurance when getting a conventional mortgage. That’s usually translated into substantial savings on the monthly mortgage payment. But it’s not worth the risk of living on the edge.
“I’d take paying for mortgage insurance any day over not having money for rainy days.” “Everyone — especially homeowners — needs to have a rainy-day fund.”
5. GETTING NEW LOANS BEFORE THE DEAL IS CLOSED
You have pre-approved for a loan. You found the house you wanted. The contract is signed and the closing is in 30 days. Don’t celebrate by financing another big purchase.
Lenders pull credit reports before the closing to make sure the borrower’s financial situation has not changed since the loan was approved. Any new loans on your credit report can jeopardize the closing.
Buyers, especially first-timers, often learn this lesson the hard way.
“THE TRICK TO SUCCESSFUL NEGOTIATION IS ACCENTUATING THE POSITIVE AND TRYING TO GRADUALLY IMPROVE THE NEGATIVE”
