First Time Home Buyers Guide
Considering buying your first home? Most likely the purchase of a home will be the largest purchase of your life. Not only will it be the largest, it can be one of the most daunting tasks if you are not prepared. Credit scores, down payments, mortgages, inspections, closing costs, etc. will all be on your mind. These are all realities that if prepared for, do not have to weigh you down. Here is a quick guide to help you better prepare yourself for this huge purchase.
Step 1: How Much Can You Afford?
The first step in the process should be to create a budget and determine if it is the right time to pursue your dream of home ownership. This can be an eye opening experience, but be honest and let the numbers guide you. Do not make the mistake of creating a budget based on income that you think you will be making in the future, but only on what you are bringing in right now. A general rule of thumb is to keep your total house payment under 30% of your monthly gross income. Some agents will disagree with me on this next concept, but I always encourage my clients to treat buying a home as an investment. Chances are you will not live in your home forever. Generally speaking, if you live in your home for at least five years, home ownership will pay off financially.
Step 2: Prepare Your Finances
Once you determine you can afford home ownership don't rush out and start looking at houses yet. The last thing you want to happen is to find your dream home and then find out your credit score is in shambles. Check your credit! This can be done in several ways. You can get a free credit report, use a local Real Estate Professionals contacts, or contact your local bank. Referrals are, in my opinion, the best option for finding a great lender. Speaking on behalf of most Real Estate Professionals, we all have our "go-to" lenders who have proved themselves over and over with our previous clients. Once you have your credit pulled you are either ready to start looking or ready to start the credit re-build process. If you are ready to move on, go to the next step. If you are in the re-build category I encourage you to contact me. I have a colleague who has helped many of my clients pursue their dream of home ownership. He is a credit guru and can give you insight as to what has/is affecting your score and provide a plan to get it where it needs to be.
Step 3: Begin Looking
Now that you've got your finances in order and you've determined how much you can afford, it's time to start looking. As of last year, 44% of home buyers found their home on the internet. With the help of sites that have IDX search tools, that pull directly from the MLS, most buyers never need to leave their homes to find the house they want. However, once you do find a house you are interested in, a Real Estate Professional should be your next contact. 88% of all home buyers use a Real Estate Agent for their home purchase. The reason for this is simple. Once a client relationship is established, a Real Estate Professional will provide certain fiduciary responsibilities to you, assist you in your home search, keep you abreast of current regulations, know local market conditions, negotiate on your behalf, adhere to a strict code of ethics, and help you navigate the complex documents associated with this tedious process. We encourage you to utilize our advanced search tool, which pulls directly from the MLS every 15 minutes. Click the link below and enjoy your search!