So you’re ready to buy your first home—or at least, you think you are. As you’re on your laptop scrolling through online listings, you may feel lightyears away from being handed the keys to your new home. In between, there are a lot of steps that involve loans, your credit score, and more. It’s a huge amount to navigate, especially for first-time homebuyers. So how do you know where to start? Is getting a home even possible? Lucky for you, helping people find their home is our forte! That’s why we compiled a list of tips for first time home buyers to keep in mind while buying their first home. Here’s how to navigate through the uncharted waters of being a first-time homebuyer:
1. Be Sure You’re Ready To Commit To A Loan
While the thought of buying a house is really exciting, you have to first ensure that you’re ready to commit to a loan. Buying a home means increasing your responsibilities! The average mortgage loan term is 15 – 30 years. While you don’t have to commit to living here for that long, you should plan on committing to the home for at least five years. A few questions you can ask yourself before making a decision include:
- Am I ready to commit to a home in this city for at least five years?
- Do I have a stable income?
- Do I have emergency funds to cover at least three months of expenses?
If your answer was no to any of these questions, you might want to halt for the moment and think about it a little further. Postponing your plans isn’t a bad thing. You could continue saving money and doing research until you know that you’re ready!
2. Identify your Needs
Now that you know that you’re fully committed and ready to get a home, you can continue to the next step: identifying your needs! A house plays a significant role in your life, so you’ll want to make sure you get the right one. While you may have dreamed of getting a huge two-story home with a giant pool, is it really something you need? Take the time to analyze where you’re at in life right now and where you’re planning to go in the future. Decipher what it is you truly need compared to what it is you want. Do you need separate bedrooms for the kids? Are you willing to commute farther to work if it means living in a certain neighborhood or community? Make a list of your needs and wants! Having a clear understanding of your home needs will help you identify the most important elements to look for when viewing homes.
3. Build Your Savings Now
Don’t wait until you’ve found your home— start saving now! The sooner you start, the better off you’ll be! You can start by setting up an automatic transfer to your savings account after receiving a paycheck. You can also set aside some bonuses and tax refunds and save them for your future home.
You can also look for ways to cut costs on your current spending habits. For example, packing your own lunch to work can cut down on the amount you spend on food every month.
Fortifying your savings account now is essential since there will be many expenses you will need to pay for throughout your home homebuying process. These expenses include:
- Home inspections
- Down payments
- Closing costs
Boosting your savings account will help you be prepared for expenses that may occur after you move into your new home.
4. Build Your Credit
When it comes to buying a home, we all know how important your score can be. Lenders use your credit score as a key factor in determining whether or not to approve you. It is also used to determine interest rates and other loan terms that can come up.
As a first time home buyer, you may not know all of the dos and don’ts. The most common credit mistakes first time homebuyers make that you should avoid include:
- Taking out a new line of credit – You should avoid opening new lines of credit. If lenders find that you’ve taken on another loan or line of credit, it could risk the final approval for your home!
- Avoiding credit altogether – While you want to avoid opening up new accounts before buying a home, you need to maintain a positive credit account to help build your score. Use your credit wisely to continue contributing to your score.
5. Hire a Real Estate Agent
Don’t do it alone, especially if you’re a first time home buyer! A real estate agent will work with you to ensure that your needs and best interests are being met throughout the entire purchasing process. Selecting an experienced agent that will guide you through the negotiation and closing process efficiently is important! However, how do you find a good real estate agent? Fortunately, Velocity Realty has the best real estate team for you! You can count on us to explain each step and coach you through each milestone, at any time of day or night! We’ve helped many first time buyers get their dream home, and can help you too! We hope these tips for first time home buyers help prepare you for your home-buying journey! If you’re ready to get started, give Velocity Realty a call at (403) 603-6800, or click here to get in contact with us!
Joey Bergandi of VelocityRealty has been helping San Diego Buyers and Sellers successfully for the last 5 years. Joey’s ideology of Real Estate stems from transparency and communication. He believes that all transactions begin and end with direct conversations and honest expectations. If you are looking to start the process today, call Joey at (408) 603-6800!