Navigating the home buying process as a first-time buyer can be difficult. Be sure to use these four tips s as you prepare to buy your first home, and check out our four home buying mistakes on Friday.
1.) Establish a Realistic Price Range
It’s important to establish a realistic price range before you begin shopping for your first home. While banks determine your existing monthly debt from insurance, credit card, student loan, auto loans and (eventually) a mortgage, they have no way of knowing what you spend monthly in other parts of your life. Groceries, entertainment and utilities, as well as any other expenses, must factor into your decision to buy a home and at what price point.
You should make a list of all monthly expenses, excluding rent or your current mortgage payment. Whatever is left after monthly expenses is the amount available for a mortgage payment and housing expenses such as taxes, insurance and home maintenance.
2.) Seek Pre-approval
Be sure to obtain pre-approval before beginning your house hunting adventure! Pre-approval, a more involved process than pre-qualification, provides you with a specific dollar amount that you can afford, rather than a general idea. It is, however, quick and relatively easy, and you can usually get pre-approved within 24 hours with the necessary income verification and paperwork. It’s easy to learn more online from Wisconsin Mortgage Corporation at wimort.com.
Once you have pre-approval, you won’t risk finding your dream home and and later realizing you can’t obtain financing.. It’s also a great tool for negotiation, as sellers will take offers from buyers with pre-approval more seriously. With the current low inventory levels, sellers are often entertaining multiple offers, so this important step could get you closer to the house of your dreams.
3.) Setting Priorities
At this stage, separate your housing “needs” from your “wants.” Needs may include square footage, number of bedrooms, commute time or school district. They cannot be changed such as school district or would have a high cost to change, such as number of bedrooms. Wants qualify as aspects of the house that can be changed more easily, such as carpeting versus hardwood floors, a pool or a finished basement. Your needs will help you focus your search, while any of your wants will help you steer towards your dream home.
4.) Choose the Right Neighborhood
Choosing the right neighborhood is very important to determining where you will end up buying a home. Crime rate, property taxes and insurance rates can all factor into whether a neighborhood will be a good fit for you. Be sure to consider long-range characteristics, such as school quality, if you intend on starting a family. Also be sure to include proximity to different locations you may use such as parks, libraries, bodies of water and shopping. Feel free to talk to potential neighbors about the feeling in the community before you put in an offer, and visit the neighborhood on different days and at different times.
Categories: Home Buying