|Did you know that, right now, first time home buyers account for 31% of the U.S. home buying market? The process for purchasing your new home can sometimes be a confusing one. There are many factors to consider; and you need to juggle everything from understanding your finance options to knowing how long the commute will be from each potential location.
Feeling a little stressed? Here are three first time home buyer tips to help you out.
1. What to Look for in Your Home
It can be difficult to sort through all the information that real estate agents are going to be telling you. Does it matter that the appliances are stainless steel? Do you really need to worry about the local schools if you don’t have kids? One thing you want to evaluate is how well your home suits your daily needs and how likely it is to have good return.
If you go to work every day, then the distance to your work and the condition of local traffic are important things to know. Having updated appliances can be important; otherwise, you might have to buy a new one three years down the line. Nearby schools can affect both property value and how quickly the house will sell once you’re ready to move, so it isn’t something you should necessarily ignore.
2. Understand First Time Buyer Loans
Most financial experts recommend spending around 28% of your income on your mortgage. This should give you an approximate range of house prices at which to look. Before you start seriously hunting, make sure you have loan options lined up and ready to go. If you don’t have much money for a down payment, there are several federal mortgage first time home buyer programs that can help you cover the initial costs.
You’ll have the option of several different mortgage types, including adjustable rate mortgages, 10 year mortgages and 30 year mortgages. Most people want a 30 year mortgage. Beware of adjustable rate mortgages. The low minimum payments might seem tempting, but they often hide an incredibly high payment schedule once the loan resets itself.
3. Buying a New Home Checklist
Once you’ve decided on a home, you should keep a list of things to check up on. Make sure you get a home inspection so there are no unpleasant surprises once you’ve signed on the dotted line. Ask to see utility bills in order to ascertain that the yearly price estimates for energy are accurate. Has your real estate agent told you what the average home selling price is for the local area? If the homeowner is already underselling, you don’t want to lose the house on a low bid. If they’re overshooting it, though, now’s the time to come in with your best number.
Do you have any first time home buyer tips for people planning to buy a new home? Let us know in the comments.