Buying Your First Home?
Buying your first home can be one of the most exciting milestones in your life – and perhaps one of the most anxiety-inducing as well!
We understand how much investment, time, and concern can go into the home-buying process. That’s why our agents go the extra mile, providing comprehensive services and advice to make searching for and closing a deal on a home as smooth as possible.
We’re here to help all first-time home buyers on their journeys. If you’re just starting, make sure to keep these things in mind.
Assistance Programs Can Help
Let’s start with some great news. If you are a first-time homebuyer, there is a good chance you qualify for one or more state or federal programs that can provide significant aid toward affording your goal. These programs can offer mortgages with lower down payments (or none at all), as well as assistance with closing costs or property improvement expenses.
You may also be able to withdraw up to $10,000 out of your IRA without having to pay an early withdrawal penalty as long as you pay it back within 120 days (although taxes may still apply).
We can help you determine what eligible programs and aid measures you may qualify for, and how you can make the most of them.
Consider What You Need Both Now and Later
Consider the long-term nature of your investment in a home when searching for what best fits your needs. What seems like a dream home now might not fit your situation in the future.
Are you looking to get married? Start or expand your family? Do you have any hobbies or ambitions you may want to pursue at home? Do you expect your career to keep you in or around your search area?
If you have doubts or concerns about whether a property you’re considering will fit your needs in the years to come, those are valid concerns that are well worth discussing.
You Should Start Saving as Early as Possible
It would be much easier if buying a home was as simple as forking over the base asking price (lump sum or mortgage, of course) and being done with it. Unfortunately, it just doesn’t work that way.
Your budget for buying a home must consider multiple factors. Up-front costs to consider include:
- The Down Payment. This amount will vary depending on the overall price of the home, the type of financing you choose, amongst other factors. You might have a relatively low down payment rate with assistance, but it can still be a significant amount of money to save up – in the thousands or tens of thousands of dollars.
- Closing Costs. There are typical fees and expenses when finalizing the purchase of a home, including mortgage and homeowner’s insurance, property taxes, and appraisal. Both the buyer and seller usually cover various closing costs, but who covers what can be negotiated.
- After-Sale Costs. Once you own the home, chances are that it still may not have everything you currently need or want. You may need to conduct repairs and renovations or wish to purchase new furnishings and appliances. There are also extraneous costs such as homeowners association fees and the costs of pool or landscaping maintenance to consider as well.
You should not only have a reasonable amount of money set aside to cover up-front costs of home buying but also up to 6 months of standard living expenses, in case of emergency. Many lenders will require proof of these savings.
Even before you know what you want, start setting money aside month to month. We can help you determine what savings goals you should be aiming for based on your area and general needs.
Prove You’re Prepared to Buy
Saving up is one part of the process, but you must also know how much a lender is willing to provide you.
This often comes in the form of a pre-approval letter, in which a lender states they will provide a mortgage for a certain amount and under specific qualifications. This letter can be a powerful asset in showing sellers that you are serious about searching for a home and have spent more time and consideration in the process than others who do not yet have approval.
The amount a lender will pre-approve you for will largely depend on your credit, employment, and other factors. The amounts different lenders may pre-approve you for can vary, so do not hesitate to shop around for the best offers. You do not have to be stuck with one institution.
Invest in a Thorough Home Inspection
If you find yourself getting more serious about potentially buying a home, you should get it thoroughly inspected.
There will likely be a few things that may need improvement or repairs within a home that has seen a substantial period of use. That’s normal and shouldn’t automatically be a dealbreaker. Repairs and renovations may even be negotiable with the seller.
But you should always be fully aware of what you’re potentially buying. Employ an inspector who provides comprehensive services, including checking for mold, pests, and other problems some standard inspections do not cover.
It is customary for the buyer to accompany the inspector on their review, and you absolutely should if you have the opportunity. This can give you a better understanding of the home and new perspectives you may have missed during an open house viewing.
If, for some reason, you are unable to attend the inspection, the inspector should provide you with a detailed report of their findings. Ensure you establish with the inspector what is to be expected from the report, and that you review it thoroughly.
Get a Trusted REALTOR On Your Side
We have only just scratched the surface here on what all you should know and expect when going into buying your first home. Yes, it’s a lot – but you never have to go at it alone!
Our agents at Midwestern Realty Group can serve as extremely valuable sources of information. Not only can we help you get the lay of the region’s real estate market, but also work hard to help you get financing, negotiate closings, and cover any bases you might not have expected.
And since the seller typically covers the cost of a realtor’s commission, you do not have to worry about added costs in the end. We are quite likely to save you a considerable amount overall!