Buying a home is oftentimes the biggest purchase many of us will make, and for first-time homebuyers, it can be an overwhelming process as there are tons of unfamiliar terms, big decisions to make, and lots of steps to follow. While you're bound to make a few mistakes along the way, there are plenty of ways to prepare yourself as best as possible.
Here are some ins and outs of what to expect, some red flags to look out for, and a quick look at basic terms that can help make your first home buying process as smooth as possible.
Make the process less overwhelming
When looking at buying a home, it's easy to get lost in the probably hundreds of steps there are. We like NerdWallet's approach
of breaking the process down into categories, specifically four:
Preparing to buy
Following this format can help keep you from getting ahead of yourself and not biting off more than you can chew, or what's even necessary depending on the part of the process you're at.
Preparing to buy
Even if you are years away from preparing to buy a home, there are things you can do now that will make your life much easier come time to shop for a property. Start saving and look at your credit score and work on strengthening it. Some costs that you may not anticipate when buying a home include:
Start putting money aside for these costs specifically so that you aren't setback with surprise expenses. There are considerable upfront costs that will arise with any home purchase, and many financial experts recommend having a savings account with around 3-6 months of living expenses saved up.
What's a mortgage?
You've probably heard this term before, but what does it actually entail? Investopedia does a great job
of explaining it in-depth but simply put, a mortgage is a loan used to purchase or maintain a home or other types of real estate.
Before looking into qualification for a mortgage, you'll want to ensure your credit score is healthy. Buyers with lower scores may have to pay a higher interest rate on their mortgage, which can drastically change the total cost of purchasing a home.
Start looking around at mortgage brokers and see if you can get pre-qualified, which will give you an educated guess of what type of mortgage you can qualify for based on your income, debt, and assets.
Start looking for properties
When you're actually ready to start shopping around for a home, it's vital that you stay tethered to reality. Remember, this is a huge and important purchase, and you'll want to set a budget and stick to it. Sit down and write a list of what your dream home would look like. Some questions you can ask yourself to get there:
What kind of neighborhood are you interested in?
Which type of home best meets your needs? (Condominium, townhome, a single-family home)
What are the features your ideal home would have?
Once you have a rough idea of the above, you can find a real estate agent to help guide you through the process. Ask around for recommendations!
Making the big purchase
The time has come – you've done all the groundwork, looked at properties, and now you're ready to buy! It can be easy to want to rush this process after what may feel like an eternity looking, but this is the time to be the most cautious. Some pro-tips to keep in mind as you purchase your first home include getting a home inspection, buying adequate home insurance, keeping cloud-based and physical copies of all documentation and paperwork, and don't stop saving!
Buying your first home is an exciting step in life! We hope these tips help as you get started. Take a look through Land Hub's current listings
to see if any match your ideal home lists!
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