First Time Home Buyer Guide
Buying your first home is exciting! It can also be a little unnerving, especially for those who are just starting out. That’s why I’ve compiled this first-time buyers guide designed to guide you through the seemingly overwhelming process of shopping, touring, and purchasing your very first home.
Before You Buy
Establish Wants Vs. Needs
Before searching for your first Westfield home, I recommend that you make a list of your “wants” and your “needs” in a home. Here are a few questions to help you organize your needs and wants:
- How close to you want to be to work or family?
- Do you prefer more of an urban, suburban, or country location?
- Are schools important to you?
- Are you willing to pay additional monthly dues for amenities such as a golf course, tennis courts, pool, or walking trails?
- How close do you want to be to convenience amenities, such as businesses and shopping?
Learn More About Loans
Another important step in the home-buying process is securing a mortgage. I recommend that you start shopping around for loans before you start really looking at houses. It’s good to know what size loan you qualify for so you have an idea of your housing price range. Mortgages can be complicated, though, especially if you know nothing about them. Here are some pointers on different types of mortgages available.
Fixed-Rate: This is a predictable mortgage with an interest rate that remains consistent throughout the entire duration. You will know what your monthly payment will be because it won’t change.
Adjustable-Rate: Unlike a fixed-rate, the interest rate of this mortgage can fluctuate with the market. The advantage is potentially low starting rates. The disadvantage is unpredictability.
Government Mortgage Programs: For those who require special financing options or assistance with down payment, programs such as the Veterans Administration and the Department of Agriculture can offer assistance to buyers who qualify. There are also additional city and state assistance programs available, and many times these programs target first-time buyers.
The Buying Process
Find Your Realtor
This is an especially important step for those with no experience in the real estate market. Finding the right Realtor—a seasoned professional with experience working with first-time buyers—can greatly reduce the stress of buying your first home by being communicative and responsive, answering all your questions, and providing you with the information and resources to make an informed buying decision.
It’s time for the fun part—house shopping! But beware, even the excitement of searching for your dream home can dull if you fail to be organized. Here are some important tips to keep in mind.
- Always view homes with your Realtor. They can help you eliminate homes that fail to meet your criteria.
- Keep track of homes you’ve seen by bringing along a camera or taking quality pictures on your phone.
- Take notes on both the positives and negatives of each home.
- Limit your daily search to four homes to prevent burning yourself out.
- Limit your search to homes that fit comfortably into your budget.
Make An Offer
Before you decide on a price, it’s important to talk with your Realtor to determine what is a fair but competitive offer. You will also want to take some time to procure your loan and get your finances in order. Here are a few other tips on understanding the components of mortgages.
Principle: This is the initial amount of money you borrow (loosely based around the price of your home).
Interest: This is a percentage of the total amount of money borrowed. It is ADDED to the overall dollar amount and is divided into your monthly payments.
Property Taxes: Annual city and county taxes are calculated and divided by the number of mortgage payments per month (usually 12).
Pay Your Upfront Costs & Close
Your upfront costs will vary depend on your particular loan and any government assistance you might be receiving. Typically, it consists of these three main payments.
Earnest Money: This “security deposit” is paid at the time of offer to show the seller that you are serious. It gets applied to your down payment or closing costs after the offer is accepted.
Down Payment: This is determined by your loan and any government assistance you might have.
Closing Costs: These are usually low for buyers and are comprised mainly of paperwork fees and charges.
Are You Ready to Get Started?
After you have prioritized your wants and needs for your first home, now you're ready to begin your home search. Contact me, and let's schedule a first time buyer consultation to discuss how I will help you make your home-buying dream come true.