Buying a new home can be equal parts exhilarating and stressful, especially for first time home buyers. As if the actual move wasn’t hard enough, there are many decisions that have to be made early in the process that will determine how smoothly it will all go, from the preliminary home search to the final sale.
This article will outline some major milestones in the early stages of the home buying experience, with the aim of getting first time home buyers up to speed quickly and effectively.
Starting the Home Search Process
Those who put in extra time and effort early in their search stand to benefit later, even though it’s not the most exciting part of the process.
Before you start your search, you have to decide what you’re looking for in a home, including the maximum price you’re able or willing to pay. It’s also important to consider what kind of neighborhood you want to live in and your desired home size. For example, if you have young children, you might be more interested in the quality of the local school district, whereas if you’re a young professional, you might place more value on what kinds of restaurants and cafes are nearby.
You should also consider whether you are interested in purchasing a home that requires additional work, or want something that you can slide into with no refurbishing required. If you’re interested in a fixer-upper, think about whether you are willing to use the property as equity to complete the modifications. Mortgage originators offer many different loan options for home improvements, including home equity lines of credit (HELOCs) and home equity loans (HELOANS).
The rest of the process always goes more smoothly when you know what you’re looking for from the outset. Make sure to spend enough time thinking things through now so that you’ll feel confident when it’s time to decide later.
Understand the Different Types of Home Loans
You should also take steps towards securing your mortgage at this time, including applying for mortgage pre-approval. Having that on hand will do a lot for your peace of mind, and will make your eventual purchase go more smoothly.
If you’re unfamiliar with how home loans work, study up on the different kinds of home loans available today. It’s worth taking the time to learn the differences between conventional loans like standard mortgages and government-insured options like FHA and USDA loans.
For example, there are several common misconceptions about mortgages that ignore the availability of FHA loans for those without a pristine credit score or enough savings for a 20% down payment. If you decide that a conventional mortgage is the best option for you, there’s plenty to consider as you seek mortgage approval.
Consult the Market
Once the basics are out of the way, it is time to look at what your dream home will be valued at in the actual real estate market in your area.
It’s important to make allowances for the many hidden costs that can pop up during the home buying process. Possible expenditures include a home appraisal, inspections, warranty, moving costs, and insurance. The home buying process will almost certainly cost more than you’re expecting, so set aside a little extra in case you need to pay for contingencies and emergency expenses.
Find the Right Agent for You
Once you have an idea what kind of home you’re looking for and how much it will probably go for, it’s time to find an agent to help you through the rest of the home buying process. Professional agents can be a source of neighborhood-centric knowledge, and can tell you about the conditions of the market, all of which gives you a leg up in the search for a suitable home.
Be sure to ask prospective agents the right questions. The key is to make sure you trust the agent’s competence and ability to secure the kind of home you’re looking for within your budget. The best agents will take time to understand your situation so that they can find the perfect home for you. Good agents also make themselves available to you after closing to go over any questions or unforeseen complications that may arise.
Hitting the Market and Sealing the Deal
Once you’ve found a quality agent, the fun part of finding your dream home can begin. Being properly prepared will let you act quickly when you find a property you’re ready to buy.
Buying a home can be stressful, but keeping calm and working through the various stages methodically makes a huge difference. Remember to enjoy the process a little, too – it’s exciting to find and move into a new home.