5 Lessons for First Time Home BuyersIf you're a first time home buyer and you're planning to make a home purchase in the near future, you need to educate yourself on how the process works. You may have received advice from friends or relatives who have purchased homes before. This is good. But don't be mislead by incorrect information. Make sure you keep the following five lessons in mind. 1. Start by finding a mortgage broker or lender. Don't start out by contacting a real estate agent and asking to see some houses. You don't know what you can afford yet, and the amount of home you can afford, dollar per dollar, will significantly influence which home you purchase. Start the process by visiting a local lender and getting preapproved for a mortgage loan that's close to the amount you expect you'll need to pay. Once you've been preapproved, you can search for a home with confidence. This step is especially crucial if you have a low credit score and you're not sure whether you'll qualify for a loan at all. 2. Don't skip the home inspection. This is something you may be tempted to do. You may walk through the home yourself or with your real estate agent and conclude that the place is in great shape. You may decide that a home inspection isn't necessary. This is unwise. Don't move forward with your home purchase until you've gotten the home you're interested in inspected by a professional. 3. Find out what similar homes in the neighborhood are selling for before you make an offer. Many first time home buyers don't realize they don't necessarily have to let the seller's asking price determine the offer they make. Instead of simply placing an offer slightly below what the seller is asking, do some research and find out what other similar homes in the neighborhood have recently sold for or are currently selling for. Make your offer based on this figure. It will ensure that you don't get ripped off and will help you when negotiating, too. 4. Check out the lifestyle factors of the surrounding area before you buy. What lifestyle factors should you consider when purchasing a home? There are many that come into play. Do you plan to raise a family? If so, make sure the neighborhood where you buy has good schools. Are there jobs in the area? More importantly, are there jobs in that area that relate to your career? Without this, you'll find it hard to pay off your new home loan. Do you plan to stay in the area for at least three to five years? Don't buy if you can't stay put for a significant length of time. 5. Make sure you can truly afford your mortgage. Forget what your lender told you. Forget the discount the seller is offering. Crunch the numbers yourself. Can you really afford to make this purchase? Are you truly ready to take on the responsibility of a 30 year fixed rate mortgage? If you're not, take some time to consider what steps you should take to more adequately prepare. If you've reviewed your financial situation thoroughly and you know you're ready, go for it. |
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