Published September 17, 2019
5 Pieces of Advice for First Time Home Buyers
Buying your first home can be a daunting process. For years, you’ve lived in apartment after apartment but the time finally comes that you can buy your own home. A lot of first time home buyers have expressed to our team that they don’t know where to start. We’ve put together 5 tips to help you move into your starter home.
- 1. Get Your Finances in OrderIf it were as easy as the statement above, we know you would have done it already. Start small by buying generic grocery goods and cooking at home more. Try to put away a little every month to build up an emergency fund. The most important thing is to start the process with less debt and keep it off. Your new home may have to have some rooms that are bare or use perfectly good furniture from a second hand shop. The goal is to get you into your home and keep you there!
Determining how much home you can afford is a big part of the picture. A standard rule is that your monthly home costs should not exceed more than 25% of your monthly paycheck. Your mortgage lender can help you figure out exactly what you can safely afford and how much you are going to need to save for a down payment.
As far as your down payment, there are many low interest rates that can help your purchase a home. If you can, try and save up the 20% for a 15 year fixed loan because that will save you money in the long run. Don’t forget the closing costs. All of the inspections will run you about 3-4% of the price of the home. Budget this into your total finances and down payment. Waiting a little longer to make a home purchase can save you more money in the future. - 2. Get PreapprovedOnce you have figured out your budget and approximate down payment, it’s time to meet with a lender. Once you’ve save the 20% for the down payment and closing costs, the lender will assist you with the other 80%. You’ll need to show at least 2 years of income along with your tax records. If you have no debt or bad credit, there are underwriters who will work with you to help make your home dreams a reality.
- 3. Finding Your HomeOnce you have your preapproval letter, this will let sellers and agents know that you are a serious buyer. At this point, you should get a real estate professional to represent your side of the sale. Your realtor will help you narrow down what is essential in your first home and what you could do without. They will protect your interests and help you find a home within your price range in a neighborhood that fits your lifestyle. While you may find a home online, we recommend relying on local insights on an area from your real estate agent. Your real estate agent will identify open houses and help you get into a home where you can build long term equity.
- 4. Make a Competitive OfferOnce you’ve done all this work to get control of your finances and locate the perfect home, don’t undermine your journey by putting an offer that is unrealistic. This is another great reason to have a realtor because they will help you make an acceptable and competitive offer. Instead of making an outlandish offer that is over your budget just to secure your purchase, try writing a personalized letter to the seller introducing yourself and describing how excited you are about the home.
- 5. Closing on Your HomeCongrats! The hard work is almost done! Your agent will work with the closing agent to ensure a speedy closing. Your closing could take anywhere from 30 to 60 days. If you don’t understand any of the closing documents, ask your realtor. They will be instrumental in helping your understand the documents that will secure your home purchase
Buying that first home can be a handful but we can help! Our qualified and experienced buyers agents are experts in assisting first time home buyers get into their first home. To speak with one of our buyers agents, give us a call at 919.891.3612, email us at info@cqrealtygroup.com, or stop by our office at 525 New Waverly Place in Cary. We would love to help get you into your first home.
