5 Most Important Tips for First Time Home Buyers

It is no secret that the market favors buyers right now. Rates are low and inventory is on the rise; if you can qualify for a mortgage it is a good time to take advantage. Personally, I have many friends who are looking to buy or are in the process of purchasing their first home. While it is certainly an exciting time, you will want to ensure that you are prepared for possibly a lengthy and volatile process. Since I seem to be giving the same pieces of advice as of late, I thought I would share them here in case others could benefit as well. Without further ado, here are my top 5 tips for first time home buyers!

• First and foremost, get pre-approved. The last thing you want is to start looking at homes and falling in love with a property only to find that it is outside of your affordable range. By seeking pre-approval first, you will know exactly how much house you can afford as well as be able to determine your estimated monthly mortgage payment. Many sellers look for proof of funds or pre-approval when considering offers, so if you find yourself in a bidding war and you are one of the potential buyers with secured financing, you will have a better chance of getting that call that it is time to go under contract.
• Make a list, check it twice. Not a “nice vs. naughty list”, but a “make or break” list. When I bought my first home, I initially did not do this. I had an idea of what I wanted, but not what was a “must have” versus a “nice to have”. After looking at a handful of homes, I finally sat down and made this list. Admittedly the first draft contained many items outside of my price range; however, after being honest with myself and considering my budget, I was able to narrow down a realistic listing of what items would be deal breakers. After this, I was able to eliminate properties without even seeing them just by looking at the listing. This saved me time and in a buyers’ market time is of the essence.
• Consider the future. While viewing a property, make sure it fits your current needs as well as at least 5 years into the future. While you may not have crystal ball to make predictions, you should be able to make reasonable assumptions on future needs. Are you planning on expanding your family? Adding a pet that may need a fenced in yard? Do you have an aging family member who may need to stay with you? Try to think broadly and honestly about any future plans and how these will impact your home needs.
• Add to your required down payment, if possible. Even if you qualify for an FHA loan, you will still likely bring cash to closing. While the amount is lesser than that of a conventional mortgage, you may want to consider putting more money down if you can. This will decrease your mortgage obligation, monthly payments, and increase your starting equity.
• Do not skip the home inspection or final walk-through. I have seen these mistakes made too many times. By attending the home inspection, you can see potential issues first-hand instead of reading about them on the final report. This will give you an opportunity to eliminate surprise issues that may impact your financing or contingent contract. The final walk-through is also imperative to be present for because this is your last chance to uncover anything that may have been missed when you were looking at the property before this point. Make sure you check all the faucets, appliances, light switches, etc.

Buying your first home does not have to be a daunting task. With some planning and smart thinking, you can allow yourself to be excited about the process and end goal. Welcome to home ownership! May rates and down payments forever be in your favor!