Suggestions for First Time Homebuyers
August 15, 2017 | Elite Realty
Buying a home for the first time can be stressful and the related costs can be overwhelming. For most, it is the largest purchase one has made and the process can also be confusing. An analysis of the Census report by Trulia determined that owner households formed at double the rate of renter households in the first quarter of 2017. All of the data points to the possibility of a turnaround in the homeownership rate this year, after a decade of gradual decline. As Southwest Florida is a favored place for young families and others looking to enter the housing market, below are some tips to ease some of the stress that can be caused by a first-time home purchase.
Analyze monthly earnings, current monthly bills, moving costs, closing costs, and any other expenses involved to determine a budget. Using a home affordability calculator can be a great tool to use in determining this.
Review your credit history as this is an important factor to be considered by a bank in approving a mortgage loan and it will play a primary role in the determination of what kind of interest rate will be offered.
Devising a plan and begin saving for a downpayment as early on as possible. It is common to put 20 percent of the home’s purchase price down, but an increasing number of lenders offer loans that require a much lower downpayment.
Research downpayment options, such as federal mortgage programs with Fannie Mae and Freddie Mac, Federal Housing Administration (FHA) loans, Veteran Affairs loans and other first-time homebuyer programs.
Research mortgage options, as there are 30-year fixed rate mortgages, 20-year or 15-year fixed loans, adjustable rate mortgage options, and more.
Compare mortgage rates from at least three different lenders to see where you can save money. Also, get a preapproval letter. This can give you an upper hand in approaching a seller.
Evaluate what type of housing/property you want to buy (single-family home, townhome, condominium) as well as the square footage, lot size, amenities, and maintenance details related to each option.
Consider the neighborhood (school district, home value, safety and crime statistics, traffic, distance to grocery stores and other place you will travel to regularly).
Find out what the home inspection limitations are (some don’t include tests for things like radon and mold) and whether you will have to request additional testing, attend the inspection and ask a lot of questions.
Finally, look into homeowners insurance options (shop around and compare rates), enter into negotiations and make a solid offer.