Few things are more exciting than owning a home for the first time. And yet there are also few things more uncertain than owning a home for the first time. A first time home buyer should arm him or herself with an abundance of knowledge, patience and time to emerge from the home-ownership journey victorious.
How To Succeed With Your First Home Mortgage
Do the Work
One of the first things aspiring homeowners should do is check the prices of homes in the area they’re interested in moving to. This gives a solid indication of how much they’re likely to pay for a home in that area and some of the factors that determine those prices. This step is easier when using a multiple listing service, or “MLS.”
Consider Extra Costs
There’s more to the cost of being a homeowner than just the mortgage. Extra costs include homeowners insurance, taxes, settlement/title fees, origination fees, maintenance and homeowners’ association fees. With so many extra responsibilities, hopeful homeowners should save up more than they think they’ll need. Doing so can mean the difference between signing papers and starting back at square one. For an idea of the average closing costs in a specific state, yearly closing cost surveys are available
Dissect the Budget
A hopeful home buyer should sit down and disassemble her or his budget to its core, leaving no penny unturned. While this may be a tedious step in the home buying process, it’s also one of the most essential. It’s best to not devote more than 28 percent of income to housing costs.
In addition to considering current income and budget, individuals should also consider their future employment and if there are any potential changes in employment. Starting a savings account specifically for emergency residential repairs or replacements is a great idea. Air conditioners, washers and plumbing systems don’t always wait until a homeowner gets a raise before breaking down.
Hobnob With Realtors
Spending more time with realtors is another good idea for first-time home buyers. While information is easily available online, realtors will undoubtedly be better informed as to the current state of the real estate market. They’ll also be able to let individuals know how likely the market is to either improve or decline in the future, which impacts a person’s decision to buy a home in the coming months.
Get a Solid Idea of What it Means to Be a Homeowner
It’s also good to talk with current homeowners to see what they have to say about owning a home. Buying new appliances, maintaining a landscape, dealing with plumbing problems and unexpected czosts are just some of the things homeowners have to deal with. The unsuspecting and uninitiated may be disappointed to learn that owning a home isn’t always as glamorous as they imagined. A seemingly simple problem can turn into a financial black hole.
Collect Financial Documents
Prospective homeowners can expect to have to gather an abundance of paperwork. Lenders request everything from bank account statements and pay stubs to W-2s, tax returns and old report cards (maybe not that last one). Having them already on hand saves an abundance of time.
Becoming a successful first time home buyer requires a great deal of preparation. Just as warming up before a workout helps prevent injury, so too does warming up before looking into becoming a home buyer. Download the First Time Home Buyer Checklist below to ensure you stay on track during your home buying journey!