64.1 percent of Americans are homeowners. Are you looking to join this club? Thumbs up!
Homeownership comes with a number of benefits. You get to build wealth over time, you can customize its design and appearance, and you enjoy significant tax deductions.
Exciting, right?
However, the process of acquiring a home can be long and complex, especially if you’re a first-time buyer. Worry not, though aspiring homebuyers. We are here to take the guesswork and pains out of this house purchasing process.
Here’s a checklist for first time home buyers.
Determine Your Housing Needs
A common mistake first time home buyers make is entering the market without a fine grasp of their housing needs. If you do this, you might end up acquiring a house not because it’s what you needed, but because you liked it at first sight!
As such, the first step to buying a house is to pinpoint your exact housing needs. Consider the following points:
When you have answers to these questions, you’re more likely to find the right home.
That said, we all aspire to own dream homes. If you’re anything like the vast majority of first-time house buyers, it’s unlikely that your first home will also be your dream home. It’s vital to embrace that fact that what you need right now is a home that meets your needs, not wants.
Establish a Budget
A house is one of the largest financial investments you’ll ever make. Right now, the average price of a home in the United States is about $225,000.
First, now that you already know your housing needs, you can easily narrow down to specific properties and determine the price range. Can you afford it?
This is why you need to establish a budget.
Start by looking at your finances. If you’re able to pay for the house in cash, good for you. But if you’re going to rely on a mortgage, budgeting becomes even more crucial.
As a general rule of thumb, you need to be able to pay at least 20 percent of the house’ cash price. So if the home you need costs $300,000, you should be able to put down at least $60,000. If you’re unable to raise this amount, then it’s clear the house is out of your budget.
In this case, you will need to revise or scale down your housing requirements. Or you may want to postpone the purchase until you get your finances right.
Get Pre-Approved for a Mortgage
There’s nothing imprudent about buying a home through a mortgage. After all, about 70 percent of homeowners in the U.S. have a mortgage.
While a mortgage can help you achieve your dream of homeownership, securing one can be challenging, particularly if your credit score isn’t in the green zone.
It’s, for this reason, you must get pre-approved for a mortgage before starting to hunt for a property. Pre-approval also lets you know the amount of money you’ll eventually qualify for, which enables you to know the price range of houses you will be searching.
To enhance your chances of getting the best mortgage lender and securing a mortgage approval, it’s highly advisable to work with a mortgage broker like a home loan specialist.
This professional won’t just increase your chances of securing a mortgage. They’ll also give your handy financial advice to ensure you’re purchasing a property that suits not only your housing needs but also your financial situation.
Hire a Real Estate Agent
Another professional you need on your team during the home buying process is a real estate agent.
Yes, an agent will add to your costs, but their services are worth the money. You see, hunting for a house is an exciting task, but that’s where the fun ends. When it comes to negotiating on a price and closing the deal, you’ll certainly fall short.
A local real estate agent will take the hard work out of your house hunting exercise. They know the properties that are on the market in your preferred neighborhood, so you won’t be moving from door to door looking for a “house for sale” sign.
Now, the question is: how do you find an experienced and reliable local real estate agent?
Contact any of your friends or relatives who live in the area you want to snap up a house and ask whether they can recommend an agent. If someone you know has a good experience with a certain agent, you can trust that they’ll also offer you a similar experience.
If you’re unable to get leads from your social circles, take your search online. The search engine will pull results of real estate agents near you, but be sure to evaluate ratings and read reviews before settling on an agent.
Strike Quickly
After finding the right property, make an offer and close the deal as quickly as possible.
Some first-time buyers make the mistake of dragging their feet once they find an ideal property.
Some think they’ll find an even better property down the road.
Well, you’ll always find a better house if you keep looking, but it will certainly be pricier. And by the time you come back to your first option, you’ll find it sold!
The gist of this is move quickly after finding an ideal home. With an agent on your team, closing the deal shouldn’t be an uphill task.
Use This Checklist for First-Time Home Buyers
Fewer things are as exciting as shopping for a first home. However, don’t let excitement get in the way of doing the basics right. With this checklist for first time home buyers, you now know what you need to do.
All the best and keep reading our blog for more real estate tips and property management. Visit The Real Estate section of our website right now for more frugal insight and information.
Determine Your Housing Needs
A common mistake first time home buyers make is entering the market without a fine grasp of their housing needs. If you do this, you might end up acquiring a house not because it’s what you needed, but because you liked it at first sight!
As such, the first step to buying a house is to pinpoint your exact housing needs. Consider the following points:
- How big is your family right now?
- How big will your family grow in the future?
- Do you work from home?
- How much garage space do you need?
- What features do you want the house to have?
- What about nearby amenities like schools and hospitals?
That said, we all aspire to own dream homes. If you’re anything like the vast majority of first-time house buyers, it’s unlikely that your first home will also be your dream home. It’s vital to embrace that fact that what you need right now is a home that meets your needs, not wants.
Establish a Budget
A house is one of the largest financial investments you’ll ever make. Right now, the average price of a home in the United States is about $225,000.
First, now that you already know your housing needs, you can easily narrow down to specific properties and determine the price range. Can you afford it?
This is why you need to establish a budget.
Start by looking at your finances. If you’re able to pay for the house in cash, good for you. But if you’re going to rely on a mortgage, budgeting becomes even more crucial.
As a general rule of thumb, you need to be able to pay at least 20 percent of the house’ cash price. So if the home you need costs $300,000, you should be able to put down at least $60,000. If you’re unable to raise this amount, then it’s clear the house is out of your budget.
In this case, you will need to revise or scale down your housing requirements. Or you may want to postpone the purchase until you get your finances right.
Get Pre-Approved for a Mortgage
There’s nothing imprudent about buying a home through a mortgage. After all, about 70 percent of homeowners in the U.S. have a mortgage.
While a mortgage can help you achieve your dream of homeownership, securing one can be challenging, particularly if your credit score isn’t in the green zone.
It’s, for this reason, you must get pre-approved for a mortgage before starting to hunt for a property. Pre-approval also lets you know the amount of money you’ll eventually qualify for, which enables you to know the price range of houses you will be searching.
To enhance your chances of getting the best mortgage lender and securing a mortgage approval, it’s highly advisable to work with a mortgage broker like a home loan specialist.
This professional won’t just increase your chances of securing a mortgage. They’ll also give your handy financial advice to ensure you’re purchasing a property that suits not only your housing needs but also your financial situation.
Hire a Real Estate Agent
Another professional you need on your team during the home buying process is a real estate agent.
Yes, an agent will add to your costs, but their services are worth the money. You see, hunting for a house is an exciting task, but that’s where the fun ends. When it comes to negotiating on a price and closing the deal, you’ll certainly fall short.
A local real estate agent will take the hard work out of your house hunting exercise. They know the properties that are on the market in your preferred neighborhood, so you won’t be moving from door to door looking for a “house for sale” sign.
Now, the question is: how do you find an experienced and reliable local real estate agent?
Contact any of your friends or relatives who live in the area you want to snap up a house and ask whether they can recommend an agent. If someone you know has a good experience with a certain agent, you can trust that they’ll also offer you a similar experience.
If you’re unable to get leads from your social circles, take your search online. The search engine will pull results of real estate agents near you, but be sure to evaluate ratings and read reviews before settling on an agent.
Strike Quickly
After finding the right property, make an offer and close the deal as quickly as possible.
Some first-time buyers make the mistake of dragging their feet once they find an ideal property.
Some think they’ll find an even better property down the road.
Well, you’ll always find a better house if you keep looking, but it will certainly be pricier. And by the time you come back to your first option, you’ll find it sold!
The gist of this is move quickly after finding an ideal home. With an agent on your team, closing the deal shouldn’t be an uphill task.
Use This Checklist for First-Time Home Buyers
Fewer things are as exciting as shopping for a first home. However, don’t let excitement get in the way of doing the basics right. With this checklist for first time home buyers, you now know what you need to do.
All the best and keep reading our blog for more real estate tips and property management. Visit The Real Estate section of our website right now for more frugal insight and information.
