The number of first-time home buyers has been decreasing throughout the last couple of years. Compared to the previous year, the number has decreased from 42% of home sales to 31.7%. That is a sizable amount of people. One of the reasons for that may be that people trying to break into the market may not know what to do and how to approach the process.
The 9 tips for first-time home buyers below will help you plot out a plan and will help you get over the fear that is probably stopping you from going for it.
- Upfront Costs – Other than having a sizable amount of money saved up for a deposit, you will want to make sure you have some cash saved for any costs that you will have upfront. You will need inspection costs, closing costs, application fees, and moving expenses. They can add up quickly if you are not prepared for them.
- Credit History – Before applying for a loan, you need to sort out your credit history. Make sure you have a credit score that is high enough to get a decent loan. Most lenders prefer a number over 700 but check into the specifics of your lender. The second part of this history is how well you pay your bills, how long you stay in one place, and how long you hold a job. Make sure your record is as good as you can have it, which needs to start as soon as you turn 18.
- Think Future – When considering the home you are going to look for, you need to think ahead to the future. The house needs to be adequate to support your plans, such as having a child or working from your home. If it is thought of now, it may become a reality. Your home needs to be able to keep up with the changes in your life without making you regret your choices.
- Budget – You will want to build a budget that includes all your incoming funds and outgoing bills. This needs to be detailed, down to how often you have your haircut and how much it costs. Details are vital to ensure that you have an accurate number left over that can go to a house payment. As a first home buyer, you need to know what you are working with, and your lender will want to know the same information.
- Pre-Approval Loan – You will want to go online and find some lenders to work with. Get preapproved for a loan through a lender that you have checked into, and never go with the first option. Check around for a reputable lender that offers you reasonable rates. Fill out the application and wait for a decision. This will let you know how much money you can loan, plus it will give you an idea of how much your payments will be.
- Research – Once you have an estimate of what you can borrow, you will need to research the type of home you want, the location you are considering, and the current market values. You will want to have some backup ideas because the home you want may not be on the market, and if it is, it may not be within your budget. Never give up, and always have a couple of options you would be willing to accept.
- First Home Owners Grant – Go to their site and follow the steps that they require to see if you can qualify for the first homeowners grant. It could get you up to $10,000, so it is an easy step that you should take the time to do.
- Consider Building – Buying a home that has already been built may not be as easy as you think. Especially if you have some ideas for what you are looking for. It may be a good idea to buy some property and hire a general contractor to build a new home designed the way you want.
- Agent – Take the time to find a suitable real estate agent or broker that can find you a home that fits your needs and budget. Your success lies in the hands of the agent, so make sure you take the time to hire one with a good reputation who knows the area.
These 9 tips for first-time home buyers can make the difference between buying a home for life or buying one for a few years. If you want a long-time place to hang your hat, you need to go through the steps and mark each one off in the order they are listed here. Once you have all the lines checked off, you will be in your own home that will serve you and your family for a lifetime or two.
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