Finding the perfect home that meets all your needs can seem impossible and often discouraging, but with the right mindset and some preparation you’ll be in your new home before you know it! Here are 10 things you need to know as a first time home buyer to make your home search as smooth as possible:
Start Saving Early
It’s never too early to begin saving up to buy a home. This is one of the biggest purchases you’ll make in your life, so you'll need to be prepared to make a down payment, as well as pay for other expenses like closing costs (usually 2%-5% of your loan amount) and moving fees. The sooner you start saving the better, as a larger down payment usually means your interest rates will be lower and you may not have to pay for Private Mortgage Insurance.
Know your Credit Score
Whether or not you will be able to qualify for a mortgage depends heavily on your credit score. Every 12 months you are able to get free copies of your credit reports from TransUnion, Equifax, and Experian. Be sure to look over these reports carefully and dispute any errors that could negatively impact your score. Continue paying all your bills on time, keep credit card balances low and the card accounts open (though you should try to not have more than 2-3 credit cards at once).
Make a List of Must-Haves
Spend time thinking about your lifestyle and the type of house that would accommodate your needs. Do you love hosting friends and family? Make sure your new home has a big kitchen and a guest bedroom. Have you dreamed of planting a garden? Add “backyard” to your list. Be sure to also consider what you might be willing to do without in a new home.
Get Pre-Approved for a Mortgage
Getting a pre-approval from a mortgage broker like Petra Cephas shows real estate agents and home sellers that you’re serious about buying a home— and that you’re fully qualified to do so. We’ll analyze your financial situation and help you determine exactly what your budget should be so you know how much house you can realistically afford.
Work with a Real Estate Agent
A good real estate agent who knows the market you’re shopping in will be a boon to your home search. They will help you find a home that meets your needs and your budget, as well as negotiate with the seller on your behalf. At Petra Cephas, we work with a variety of realtors and are happy to give you a recommendation to a realtor we know and trust.
Take Advantage of Open Houses
Even though virtual home tours have become more common, they can’t show you all the little details about a home, like if the carpets smell weird or how noisy the road outside is. It’s best to use virtual tours to eliminate homes from consideration and then tour the ones you’re really interested in in person.
Buy Enough Home Insurance
In order for your mortgage to be approved, you will need to purchase homeowner’s insurance. Make sure you get enough coverage to repair structural damage and replace damaged belongings.
Explore Pre-Market Listings
Looking at homes that are being prepared for listing will put you ahead of other potential buyers who are only looking at active listings. Sometimes you can even make an offer before the home is officially on the market!
Stick to your Budget
In a competitive market, you may feel pressured to make an offer that is outside your budget in order to beat another buyer’s offer. However, this will likely cause you financial stress in the long run. It’s important to manage your expectations, stick to your budget, and know that another house will be just around the corner.
Work with a Mortgage Broker
When you’re shopping for a home, you should be spending your time doing just that— shopping for a home. A mortgage broker like Petra Cephas can compare your loan options for you. We will always find you the best loan for your situation because our fiduciary duty is to you— not the lender. That’s the Mortgage Broker Advantage!